Underwriting Agreement

NGL ENERGY PARTNERS LP 8,800,000 Common Units Representing Limited Partner Interests UNDERWRITING AGREEMENT

Exhibit 1.1

 

 

NGL ENERGY PARTNERS LP

 

 

8,800,000 Common Units

 

Representing Limited Partner Interests

 

 

UNDERWRITING AGREEMENT

 

 

 

 

Dated:  February 15, 2017

 

 



 

Table of Contents

 

 

 

Page

 

 

 

SECTION 1. Representations and Warranties

 

2

 

 

 

SECTION 2. Sale and Delivery to the Underwriters; Closing

 

19

 

 

 

SECTION 3. Covenants of the Partnership

 

20

 

 

 

SECTION 4. Payment of Expenses

 

24

 

 

 

SECTION 5. Conditions of Underwriters’ Obligations

 

25

 

 

 

SECTION 6. Indemnification

 

28

 

 

 

SECTION 7. Contribution

 

31

 

 

 

SECTION 8. Representations, Warranties and Agreements to Survive Delivery

 

32

 

 

 

SECTION 9. Termination of Agreement

 

32

 

 

 

SECTION 9A. Defaulting Underwriter

 

33

 

 

 

SECTION 10. Notices

 

34

 

 

 

SECTION 11. Parties

 

34

 

 

 

SECTION 12. Compliance with USA PATRIOT Act

 

35

 

 

 

SECTION 13. GOVERNING LAW AND TIME

 

35

 

 

 

SECTION 14. Effect of Headings

 

35

 

 

 

SECTION 15. Definitions

 

35

 

 

 

SECTION 16. Permitted Free Writing Prospectuses

 

39

 

 

 

SECTION 17. Absence of Fiduciary Relationship

 

39

 

 

 

SECTION 18. Research Analyst Independence

 

40

 

 

 

SECTION 19. Consent to Jurisdiction

 

40

 

i



 

EXHIBITS

 

Exhibit A

Significant Subsidiaries of the Partnership; General Partner

Exhibit B

List of Persons Subject to Lock-Up

Exhibit C

Form of Lock-Up Agreement

Exhibit D

Form of Opinion of Partnership Counsel

Exhibit E

Price-Related Information

Exhibit F

Issuer Free Writing Prospectus

Exhibit G

Additional Subsidiaries of the Partnership

 

ii



 

NGL ENERGY PARTNERS LP

 

8,800,000 Common Units Representing Limited Partner Interests

 

UNDERWRITING AGREEMENT

 

February 15, 2017

 

Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, New York 10010-3629

 

Wells Fargo Securities, LLC

375 Park Avenue

4th Floor

New York, New York 10152

 

As Representatives of the several Underwriters

 

Ladies and Gentlemen:

 

NGL Energy Partners LP, a Delaware limited partnership (the “Partnership”), confirms its agreement with Credit Suisse Securities (USA) LLC (“Credit Suisse”), Wells Fargo Securities, LLC (“Wells Fargo”) and each of the other Underwriters named in Schedule I hereto (collectively, the “Underwriters”) for which Credit Suisse and Wells Fargo are acting as representatives (in such capacity, the “Representatives”), with respect to the issuance and sale by the Partnership of a total of 8,800,000 common units (the “Initial Units”) representing limited partner interests in the Partnership (the “Common Units”), and with respect to the grant by the Partnership to the Underwriters, of the option described in Section 2(b) hereof to purchase all or any part of the 1,320,000 additional Common Units.  The Initial Units to be purchased by the Underwriters and all or any part of the 1,320,000 Common Units subject to the option described in Section 2(b) hereof (the “Option Units”) are hereinafter called, collectively, the “Units.”  Certain terms used in this Agreement are defined in Section 15 hereof.

 

NGL Energy Holdings LLC, a Delaware limited liability company (the “General Partner”), is the sole general partner of the Partnership.  NGL Energy Operating LLC, a Delaware limited liability company (“NGL Operating”), and the other entities listed in Exhibit A hereto are sometimes collectively referred to herein as the “Subsidiaries.”  Each of the General Partner and the Partnership is sometimes referred to herein as a “Partnership Party,” and they are sometimes collectively referred to herein as the “Partnership Parties.”  Each of the Partnership Parties and each of the Subsidiaries is sometimes referred to herein as a “Partnership Entity,” and they are sometimes collectively referred to herein as the “Partnership Entities.”

 

The Partnership understands that the Underwriters propose to make a public offering of the Units as soon as the Representatives deem it advisable after this Agreement has been executed and delivered.

 

1



 

The Partnership has prepared and previously delivered to you a preliminary prospectus supplement dated February 15, 2017 relating to the Units and a related prospectus dated February 15, 2017 (the “Base Prospectus”). Such preliminary prospectus supplement and Base Prospectus, including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, are hereinafter called, collectively, the “Pre-Pricing Prospectus.” Promptly after the execution and delivery of this Agreement, the Partnership will prepare and file with the Commission a prospectus supplement dated February 15, 2017 (the “Prospectus Supplement”) in accordance with the provisions of Rule 430B and Rule 424(b) and the Partnership has previously advised you of all information (financial and other) that will be set forth therein. The Prospectus Supplement and the Base Prospectus, in the forms first furnished to the Underwriters for use in connection with the offering of the Units (whether to meet the request of purchasers pursuant to Rule 173(d) or otherwise), including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, are hereinafter called, collectively, the “Prospectus.”

 

SECTION 1.  Representations and Warranties.

 

(a)                                 Representations and Warranties by the Partnership.  The Partnership represents and warrants to each Underwriter as of the date hereof, as of the Applicable Time, as of the Closing Date referred to in Section 2(c) hereof, and as of each Option Closing Date (if any) referred to in Section 2(b) hereof, and agrees with each Underwriter, as follows:

 

(1)               Status as a Well-Known Seasoned Issuer.  (A) At the respective times the Registration Statement or any amendments thereto were filed with the Commission, (B) at the time of the most recent amendment to the Registration Statement for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), (C) at any time the Partnership or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c)) made any offer relating to the Units in reliance on the exemption of Rule 163 and (D) as of the execution of this Agreement, the Partnership was and is a “well-known seasoned issuer” as defined in Rule 405, including not having been and not being an “ineligible issuer” as defined in Rule 405 in connection with the offering and sale of the Units hereunder (without taking into account any determination made by the Commission pursuant to paragraph (2) of the definition of such term in Rule 405). The Registration Statement is an “automatic shelf registration statement,” as defined in Rule 405 and the Units, since their registration on the Registration Statement, have been and remain eligible for registration by the Partnership on such an “automatic shelf registration statement.” The Partnership has not received from the Commission any notice pursuant to Rule 401(g)(2) objecting to the use of the automatic shelf registration statement form.

 

(2)               Compliance with Registration Requirements.  The Partnership meets the requirements for use of the Registration Statement under the 1933 Act and the offer and sale of the Units have been duly registered under the 1933 Act pursuant to the Registration Statement.  The Registration Statement and any post-effective amendments thereto have become effective under the 1933 Act and no stop order

 

2



 

suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Partnership, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with. The Registration Statement was initially filed with the Commission on July 8, 2013.

 

(3)               Registration Statement, Prospectus and Disclosure at Time of Sale.  At the respective times the Registration Statement and any amendments thereto became effective, at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) and at the Closing Date (and, if any Option Units are purchased, at the applicable Option Closing Date), the Registration Statement and any amendments to any of the foregoing complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

 

At the respective times the Prospectus or any amendment or supplement thereto was filed pursuant to Rule 424(b) or issued, at the Closing Date (and, if any Option Units are purchased, at the applicable Option Closing Date), and at any time when a prospectus is required (or, but for the provisions of Rule 172, would be required) by applicable law to be delivered in connection with sales of Units (whether to meet the requests of purchasers pursuant to Rule 173(d) or otherwise), neither the Prospectus nor any amendments or supplements thereto included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

As of the Applicable Time (except in the case of clause (y) below) and as of each time prior to the Closing Date that an investor agrees (orally or in writing) to purchase or, if applicable, reconfirms (orally or in writing) an agreement to purchase any Units from any Underwriter, neither (x) any Issuer Free Writing Prospectuses, if any, issued at or prior to the Applicable Time, the Pre-Pricing Prospectus as of the Applicable Time and the information, if any, included on Exhibit E hereto, all considered together (collectively, the “General Disclosure Package”), nor (y) any individual Issuer Free Writing Prospectuses issued subsequent to the Applicable Time, when considered together with the General Disclosure Package, included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

No facts or events arising after February 15, 2017 (the date of the latest update of the Registration Statement pursuant to Section 10(a)(3) under the 1933 Act) have occurred that, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement as of such date.

 

3



 

Each preliminary prospectus and the Prospectus and any amendments or supplements to any of the foregoing filed as part of the Registration Statement or any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, or delivered to the Representatives for use in connection with the offering of the Units, complied when so filed or when so delivered, as the case may be, in all material respects with the 1933 Act and the 1933 Act Regulations.

 

The representations and warranties in the preceding paragraphs of this Section 1(a)(3) do not apply to statements in or omissions from the Registration Statement, any preliminary prospectus, the Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement to any the foregoing made in reliance upon and in conformity with written information furnished to the Partnership by the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by the Representatives as aforesaid consists of the information described as such in Section 6(b) hereof.

 

The copies of the Registration Statement and any amendments to any of the foregoing and the copies of each preliminary prospectus, each Issuer Free Writing Prospectus that is required to be filed with the Commission pursuant to Rule 433 and the Prospectus and any amendments or supplements to any of the foregoing, that have been or subsequently are delivered to the Representatives in connection with the offering of the Units (whether to meet the request of purchasers pursuant to Rule 173(d) or otherwise) were and will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.  For purposes of this Agreement, references to the “delivery” or “furnishing” of any of the foregoing documents to the Representatives, the Underwriters or to counsel for the Underwriters, and any similar terms, include, without limitation, electronic delivery.

 

Each Issuer Free Writing Prospectus (if any), as of its issue date and at all subsequent times through the completion of the public offering and sale of the Units, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, any preliminary prospectus or the Prospectus that has not been superseded or modified.

 

(4)               Independent Accountants.  (i) Grant Thornton LLP, which certified the audited consolidated financial statements of the Partnership and subsidiaries as of March 31, 2016 and 2015, and for the years ended March 31, 2016, 2015 and 2014 (the “Partnership Financial Statements”), included in the Registration Statement, the General Disclosure Package and the Prospectus, are independent public accountants as required by the 1933 Act, the 1933 Act Regulations and the standards of the Public Company Accounting Oversight Board. (ii) KPMG LLP, which issued an unqualified audit report on the combined balance sheets of Gavilon Energy (The Energy Business Units of Gavilon, LLC) as of December 31, 2012 and 2011, and the related combined statements of operations, comprehensive income (loss), equity and cash flows for each of the years in the three-year period ended December 31, 2012 (the “Gavilon Financial Statements”) incorporated by reference in the Registration Statement, the General

 

4



 

Disclosure Package and the Prospectus, are independent public accountants as required by the 1933 Act, the 1933 Act Regulations and the standards of the AICPA.

 

(5)               Financial Statements.  The financial statements of the Partnership included in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules (if any) and notes, present fairly the financial position of the Partnership, the businesses acquired by the Partnership at the dates indicated and the results of operations, changes in partners’ capital/stockholders’ equity, as applicable, and cash flows of the Partnership and the businesses acquired by the Partnership for the periods specified; the financial statements of any other entities or businesses included in the Registration Statement, the General Disclosure Package or the Prospectus, together with the related schedules (if any) and notes, present fairly the financial position of each such entity or business, as the case may be, and its consolidated subsidiaries (if any) at the dates indicated and the results of operations, changes in partners’ capital/stockholders’ (or other owners’) equity, as applicable, and cash flows of such entity or business, as the case may be, and its consolidated subsidiaries, if any, for the periods specified; and all such financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved and comply with all applicable accounting requirements under the 1933 Act and the 1933 Act Regulations.  The supporting schedules, if any, included in the Registration Statement present fairly, in accordance with GAAP, the information required to be stated therein.  The information in the Pre-Pricing Prospectus and the Prospectus under the caption “Summary—Summary Consolidated Historical Financial Information” presents fairly the information shown therein and has been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement, the General Disclosure Package and the Prospectus. All “non-GAAP financial measures” (as such term is defined in the rules and regulations of the Commission), if any, contained in the Registration Statement, the General Disclosure Package and the Prospectus comply with Regulation G and Item 10 of Regulation S-K of the Commission, to the extent applicable.

 

(6)               No Material Adverse Change in Business.  Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus (in each case, exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), (A) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition (financial or other), results of operations, business, properties, management or prospects of the Partnership Entities taken as a whole, whether or not arising in the ordinary course of business (in any such case, a “Material Adverse Effect”); (B) except as otherwise disclosed in the General Disclosure Package and the Prospectus (in each case exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), no Partnership Entity has incurred any liability or obligation or entered into any transaction or agreement that, individually or in the aggregate, is material with respect to the Partnership Entities, taken as a whole, and no Partnership Entity has sustained any loss or interference with its business or operations from fire, explosion, flood, earthquake or other natural disaster or calamity, whether or not covered by insurance, or from any

 

5



 

labor dispute or disturbance or court or governmental action, order or decree, except as would not, individually or in the aggregate, result in a Material Adverse Effect; and (C) except as otherwise disclosed in the General Disclosure Package and the Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Partnership on its Common Units.

 

(7)               Good Standing of the Partnership and the General Partner.  Each of the Partnership and the General Partner has been duly formed and is validly existing as a limited partnership or limited liability company, as the case may be, and is in good standing under the laws of the State of Delaware and has power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus, and (A) to execute and deliver this Agreement and consummate the transactions contemplated hereby, (B) in the case of the Partnership, to issue, sell and deliver the Units and (C) in the case of the General Partner, to act as the general partner of the Partnership as described in the Registration Statement, the General Disclosure Package and the Prospectus.  Each of the Partnership and the General Partner is duly qualified as a foreign limited partnership or limited liability company, as the case may be, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Effect.  Exhibit A accurately sets forth each jurisdiction of foreign qualification of each of the Partnership and the General Partner.

 

(8)               Good Standing of Subsidiaries.  Each Subsidiary has been duly organized or formed, as the case may be, and is validly existing as an unlimited liability company, or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its formation, has power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package or the Prospectus and is duly qualified as a foreign limited partnership, unlimited liability company or limited liability company or corporation, as the case may be, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, all of the issued and outstanding limited liability company interests, capital stock, membership interests or other similar interests of each such Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable (except as such non-assessability may be limited by (i) Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act (the “Delaware LLC Act”) in the case of a Delaware limited liability company, (ii) Section 101.206 of the Texas Business Organizations Code in the case of a Texas limited liability company, (iii) Sections 7-80-606, 7-80-705 and 7-80-805 of the Colorado Limited Liability Company Act in the case of a Colorado limited liability company, (iv) Sections 17-29-304, 17-29-405 and

 

6



 

17-29-708 of the Wyoming Limited Liability Company Act in the case of a Wyoming limited liability company and (v) Sections 18-2030 and 18-2031 of the Oklahoma Limited Liability Company Act in the case of an Oklahoma limited liability company) and are owned by the Partnership, directly or indirectly through subsidiaries, free and clear of any Lien, other than Liens arising under the Credit Agreement and the Note Purchase Agreement; and none of the issued and outstanding limited liability company interests, membership interests or other similar interests of any such Subsidiary was issued in violation of any preemptive rights, rights of first refusal or other similar rights of any securityholder of such Subsidiary or any other person.  Any subsidiaries of the Partnership that are “significant subsidiaries” as defined by Rule 1-02 of Regulation S-X are listed on Exhibit A hereto, and Exhibit A accurately sets forth the jurisdiction of formation of each Subsidiary, each of its jurisdictions of foreign qualification and its managing members.

 

(9)               Ownership of the General Partner.  The Specified GP Holders directly or indirectly own 52% of the issued and outstanding membership interests in the General Partner; such membership interests have been duly authorized and validly issued in accordance with the General Partner Agreement, and, at the Closing Date and each Option Closing Date, if any, will be duly authorized and validly issued in accordance with the General Partner Agreement, and are fully paid and non-assessable (except as such non-assessability may be limited by Sections 18-607 and 18-804 of the Delaware LLC Act).

 

(10)        Ownership of the General Partner Interest in the Partnership.  The General Partner is and, at the Closing Date and each Option Closing Date, if any, will be, the sole general partner of the Partnership, with a 0.1% general partner interest in the Partnership (the “GP Interest”); such GP Interest has been duly authorized and validly issued in accordance with the Partnership Agreement, and, at the Closing Date and each Option Closing Date, if any, will be duly authorized and validly issued in accordance with the Partnership Agreement; and the General Partner is the record holder of such general partner interest free and clear of all Liens.

 

(11)        Ownership of Management Units. Assuming no purchase by the Underwriters of Option Units on the Closing Date, immediately following the completion of the offering contemplated by this Agreement, the Management Partners will directly or indirectly own 8,808,198 Common Units (the “Management Units”); the Management Units and the limited partner interests represented thereby will have been duly authorized and validly issued in accordance with the Partnership Agreement and will be fully paid (to the extent required under the Partnership Agreement) and non-assessable (except as such non-assessability may be affected by Sections 17-303(a), 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”)), and the Management GP Members will be the record holders of their respective Management Units free and clear of all Liens.

 

(12)        Valid Issuance of Units.  At the Closing Date and each Option Closing Date, if any, the Units and the limited partner interests represented thereby will be duly authorized in accordance with the Partnership Agreement and, when issued and

 

7



 

delivered to the Representatives against payment therefor in accordance with this Agreement, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and non-assessable (except as such non-assessability may be affected by Sections 17-303(a), 17-607 or 17-804 of the Delaware LP Act).

 

(13)        Ownership of Incentive Distribution Rights in the Partnership.  The General Partner is the record holder of all of the incentive distribution rights in the Partnership (the “Incentive Distribution Rights”) and such Incentive Distribution Rights have been duly authorized and validly issued in accordance with the Partnership Agreement, and are fully paid (to the extent required under the Partnership Agreement) and non-assessable (except as such non-assessability may be affected by matters described in Sections 17-303(a), 17-607 and 17-804 of the Delaware LP Act); and the General Partner is the record holder of the Incentive Distribution Rights free and clear of all Liens.

 

(14)                    No Other Subsidiaries.  Other than the entities listed in Exhibit A and Exhibit G hereto, as of the date of this Agreement, the Partnership does not own, and at the Closing Date, will not own, directly or indirectly, an equity interest in any corporation, partnership, limited liability company, joint venture, association or other entity.  Other than its ownership interest in the Partnership and its indirect ownership interests in the Partnership’s subsidiaries, as of the date of this Agreement, the General Partner does not own, and at the Closing Date will not own, directly or indirectly, an equity interest in any corporation, partnership, limited liability company, joint venture, association or other entity.

 

(15)        Capitalization.  The authorized, issued and outstanding limited partner interests and general partner interests of the Partnership as of the date of this Agreement is 110,059,407 Common Units, the Incentive Distribution Rights and the GP Interest, and, at the time of the purchase of the Initial Units by the Underwriters on the Closing Date, the authorized, issued and outstanding limited partner interests and general partner interests of the Partnership will consist of 118,059,407 Common Units, the Incentive Distribution Rights and the GP Interest (in each case except for subsequent issuances, if any, pursuant to this Agreement and pursuant to compensation plans described in the General Disclosure Package and the Prospectus).  The authorized, issued and outstanding limited partner interests and general partner interests of the Partnership as of the first Option Closing Date (assuming on that date the Underwriters have exercised the option described in Section 2(b) in full) will consist of 119,259,407 Common Units, the Incentive Distribution Rights and the GP Interest (in each case except for subsequent issuances, if any, pursuant to this Agreement and pursuant to compensation plans described in the General Disclosure Package and the Prospectus).  The outstanding limited partner interests and general partner interests of the Partnership have been duly authorized and validly issued and are fully paid and non-assessable (except as such non-assessability may be affected by matters described in Sections 17-303(a), 17-607 and 17-804 of the Delaware LP Act); and none of the outstanding limited partner interests or general partner interests of the Partnership was issued in violation of any preemptive rights, rights of first refusal or other similar rights of any securityholder of the Partnership or any other person.

 

8



 

(16)        Authorization of Agreement.  This Agreement has been duly authorized, executed and delivered by or on behalf of the Partnership.

 

(17)        Authorization of Units.  The Units to be sold by the Partnership under this Agreement have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Partnership pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued, fully paid and non-assessable (except as such non-assessability may be affected by Sections 17-303(a), 17-607 or 17-804 of the Delaware LP Act); no holder of the Units is or will be subject to personal liability solely by reason of being such a holder; and the issuance and sale of the Units to be sold by the Partnership under this Agreement are not subject to any preemptive rights, rights of first refusal or other similar rights of any securityholder of the Partnership or any other person, except such rights as have been effectively waived.

 

(18)        Description of Units.  The Common Units and the Partnership Agreement conform in all material respects to all of the respective statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus and such statements conform in all material respects to the rights set forth in the respective instruments and agreements defining the same.

 

(19)        Absence of Defaults and Conflicts.  None of the Partnership Entities is in violation of its Organizational Documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any Partnership Document, except (solely in the case of Partnership Documents other than Subject Instruments) for such defaults that would not, individually or in the aggregate, result in a Material Adverse Effect.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein and in the Registration Statement, the General Disclosure Package and the Prospectus (including the issuance and sale of the Units and the use of the proceeds from the sale of the Units as described in the Pre-Pricing Prospectus and the Prospectus under the caption “Use of Proceeds”) and compliance by the Partnership with its obligations under this Agreement do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event under, or result in the creation or imposition of any Lien upon any property or assets of the Partnership Entities pursuant to, any Partnership Documents, except (solely in the case of Partnership Documents other than Subject Instruments) for such conflicts, breaches, defaults or Liens that would not, individually or in the aggregate, result in a Material Adverse Effect, nor will such action result in any violation of the provisions of the Organizational Documents of any of the Partnership Entities or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Partnership Entities or any of their respective assets, properties or operations.

 

(20)        Absence of Labor Dispute.  No labor dispute with the employees of the General Partner or any direct or indirect subsidiary of the General Partner exists or, to

 

9



 

the knowledge of the Partnership, is imminent, and the Partnership is not aware of any existing or imminent labor disturbance by the employees of any of the principal suppliers, manufacturers, customers or contractors of the Partnership or any of its Subsidiaries which might reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(21)        Absence of Proceedings.  There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Partnership, threatened, against or affecting the Partnership Entities that is required to be disclosed in the Registration Statement, the Pre-Pricing Prospectus or the Prospectus (other than as disclosed therein), or that might reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or to materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Partnership of its obligations under this Agreement; the aggregate of all pending legal or governmental proceedings to which any of the Partnership Entities is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement, the Pre-Pricing Prospectus and the Prospectus, including ordinary routine litigation incidental to the business, would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(22)        Accuracy of Descriptions and Exhibits.  The information included or incorporated by reference in the Pre-Pricing Prospectus and the Prospectus under the captions “Our Cash Distribution Policy,” “Description of Common Units,” “Our Partnership Agreement,” “Material U.S. Federal Income Tax Considerations,” and “Material U.S. Federal Income Tax Considerations Supplement” and the information included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2016 under “Risk Factors—Tax Risks to Common Unitholders,” “Certain Relationships and Related Transactions, and Director Independence” and “Business—Government Regulation” and the information in the Registration Statement under Items 14 and 15 of Part II, in each case to the extent that it constitutes matters of law, summaries of legal matters, summaries of provisions of the Partnership Agreement, the General Partner Agreement or any other instruments or agreements, summaries of legal proceedings, or legal conclusions, is correct in all material respects; all descriptions in the Registration Statement, the General Disclosure Package and the Prospectus of any Partnership Documents are accurate in all material respects; and there are no franchises, contracts, indentures, mortgages, deeds of trust, loan or credit agreements, bonds, notes, debentures, evidences of indebtedness, leases or other instruments or agreements required to be described or referred to in the Registration Statement, the Pre-Pricing Prospectus or the Prospectus or the documents incorporated or deemed to be incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required.

 

(23)        Possession of Intellectual Property.  The Partnership and its Subsidiaries have valid and enforceable licenses to use, or otherwise have the right to use on reasonable terms all patents, patent rights, patent applications, licenses, inventions,

 

10



 

copyrights, inventions, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trade marks, service marks, trade names, service names, software, internet addresses, domain names and other intellectual property that is described in the Registration Statement, the General Disclosure Package or the Prospectus or that is necessary for the conduct of their respective businesses as currently conducted or as proposed to be conducted and as described in the Registration Statement, the General Disclosure Package and the Prospectus, except where the failure to have such licenses or rights to use such intellectual property would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

(24)        Material Contracts.  Each contract, document or other agreement described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus is in full force and effect and is valid and enforceable by and against the parties thereto in accordance with its terms except as the enforceability thereof may be limited by (A) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (B) public policy, applicable law relating to fiduciary duties and indemnification and an implied covenant of good faith and fair dealing.  No Partnership Entity nor, to the knowledge of the Partnership, any other party is in default in the observance or performance of any material term or obligation to be performed by it under any such agreement.

 

(25)        Absence of Further Requirements.  (A) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, (B) no authorization, approval, vote or consent of any unitholder or creditor of the Partnership Entities, (C) no authorization, approval, waiver or consent under any Subject Instrument, and (D) no authorization, approval, vote or consent of any other person or entity, is necessary or required for the performance by the Partnership of its obligations under this Agreement, for the offering, issuance, sale or delivery of the Units hereunder, or for the consummation of any of the other transactions contemplated by this Agreement, in each case on the terms contemplated by the Registration Statement, the General Disclosure Package and the Prospectus, except such as have been obtained under the 1933 Act, the 1933 Act Regulations, the rules of the NYSE or the rules of FINRA and except that no representation is made as to such as may be required under state or foreign securities laws.

 

(26)        Possession of Licenses and Permits.  Each of the Partnership Entities possesses such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except where the failure to so possess would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; the Partnership Entities are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually

 

11



 

or in the aggregate, result in a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, individually or in the aggregate, result in a Material Adverse Effect; and none of the Partnership Entities has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, if the subject of an unfavorable decision, ruling or finding, would, individually or in the aggregate, result in a Material Adverse Effect.

 

(27)        Title to Property.  The Partnership Entities have good and marketable title in fee simple to all real property owned by any of them and good title to all other properties owned by any of them, in each case, free and clear of all Liens except such as (A) are described in the Registration Statement, the General Disclosure Package and the Prospectus, (B) are arising under the Credit Agreement and the Note Purchase Agreement or (C) are not, individually or in the aggregate, material to the  Partnership Entities taken as a whole, are not required to be disclosed in the Registration Statement, the Pre-Pricing Prospectus or the Prospectus and do not, individually or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Partnership Entities; all real property, buildings and other improvements, and all equipment and other property held under lease or sublease by any of the Partnership Entities is held by them under valid, subsisting and enforceable leases or subleases, as the case may be, with, solely in the case of leases or subleases relating to real property, buildings or other improvements, such exceptions as are not material and do not interfere with the use made or proposed to be made of such property and buildings or other improvements by the Partnership Entities, except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and all such leases and subleases are in full force and effect; and none of the Partnership Entities has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Partnership Entities under any of the leases or subleases mentioned above or affecting or questioning the rights of the Partnership Entities to the continued possession of the leased or subleased premises under any such lease or sublease except for such claims that, if successfully asserted, would not, individually or in the aggregate, result in a Material Adverse Effect.

 

(28)        Rights of Way.  Each Partnership Entity has such consents, easements, rights-of-way or licenses from any person (“rights-of-way”) as are necessary to conduct its business in the manner described in the Registration Statement, the General Disclosure Package and the Prospectus, subject to such qualifications as may be set forth in the Registration Statement, the Pre-Pricing Prospectus or the Prospectus and except for such rights-of-way the failure of which to have obtained would not result in, individually or in the aggregate, a Material Adverse Effect; none of such rights-of-way contains any restriction that is materially burdensome to the Partnership Entities, taken as a whole.

 

(29)        Investment Company Act.  None of the Partnership Entities is, and upon the issuance and sale of the Units to the Underwriters as herein contemplated and the

 

12



 

application of the net proceeds therefrom as described in the Pre-Pricing Prospectus and the Prospectus under the caption “Use of Proceeds,” none of the Partnership Entities will be, an “investment company” or an entity “controlled” by an “investment company” as such terms are defined in the 1940 Act.

 

(30)        Environmental Laws.  Except as described in the Registration Statement, the General Disclosure Package and the Prospectus and except as would not, individually or in the aggregate, result in a Material Adverse Effect, (A) none of the Partnership Entities is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Partnership Entities have all permits, authorizations and approvals required under any applicable Environmental Laws and are in compliance with their requirements, (C) there are no pending or, to the knowledge of the Partnership Entities, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against any Partnership Entity and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting any Partnership Entity relating to Hazardous Materials or any Environmental Laws.

 

(31)        Absence of Registration Rights.  There are no persons with registration rights or other similar rights to have any securities (debt or equity) registered pursuant to the Registration Statement or included in the offering contemplated by this Agreement except those that have been waived or are otherwise already registered by the Partnership under the 1933 Act, and there are no persons with co-sale rights, tag-along rights or other similar rights to have any securities (debt or equity) included in the offering contemplated by this Agreement or sold in connection with the sale of Units.

 

(32)        Parties to Lock-Up Agreements.  Each of the persons listed on Exhibit B hereto has executed and delivered to the Representatives a lock-up agreement in the form of Exhibit C hereto (the “Lock-Up Agreement”).  Exhibit B hereto contains a true, complete and correct list of all executive officers of the Partnership.

 

(33)        NYSE.  The outstanding Common Units are listed on the NYSE and the Partnership has applied to list the Units on the NYSE.

 

13



 

(34)        FINRA Matters.  All of the information provided to the Underwriters or to counsel for the Underwriters in connection with any letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules 5110 or 5121 is true, complete and correct in all material respects.

 

(35)        Tax Returns.  The Partnership Entities have filed all foreign, federal, state and local tax returns that are required to be filed or have obtained extensions thereof, except where the failure so to file would not, individually or in the aggregate, result in a Material Adverse Effect, and have paid all taxes (including, without limitation, any estimated taxes) required to be paid and any other assessment, fine or penalty, to the extent that any of the foregoing is due and payable, except for any such tax, assessment, fine or penalty that is currently being contested in good faith by appropriate actions and except for such taxes, assessments, fines or penalties the nonpayment of which would not, individually or in the aggregate, result in a Material Adverse Effect.

 

(36)        Insurance.  The Partnership Entities are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; all policies of insurance and any fidelity or surety bonds insuring the Partnership Entities or their respective businesses, assets, employees, officers and directors are in full force and effect in all material respects; the Partnership Entities are in compliance with the terms of such policies and instruments in all material respects; there are no material claims by any Partnership Entity under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; no Partnership Entity has been refused any insurance coverage sought or applied for; and no Partnership Entity has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers at a cost that would not, individually or in the aggregate, result in a Material Adverse Effect.

 

(37)        Accounting and Disclosure Controls.  The Partnership Entities maintain effective “internal control over financial reporting” (as defined in Rule 13a-15 of the 1934 Act Regulations). The Partnership Entities maintain a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorizations; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (C) access to assets is permitted only in accordance with management’s general or specific authorization; (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (E) the interactive data in eXtensible Business Reporting Language (“XBRL”) included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus is in compliance in all material respects with the Commission’s published rules, regulations and guidelines applicable thereto.  Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, since the first day of the Partnership’s most recent fiscal year for which

14



 

audited financial statements are included in the Registration Statement, the General Disclosure Package and the Prospectus, there has been (1) no material weakness (as defined in Rule 1-02 of Regulation S-X of the Commission) in the Partnership’s internal control over financial reporting (whether or not remediated), and (2) no fraud, whether or not material, involving management or other employees who have a role in the Partnership’s internal control over financial reporting and, since the end of the Partnership’s most recent fiscal year for which audited financial statements are included in the Registration Statement, the General Disclosure Package and the Prospectus, there has been no change in the Partnership’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

 

The Partnership’s independent public accountants and the General Partner’s board of directors have been advised of all material weaknesses, if any, and significant deficiencies (as defined in Rule 1-02 of Regulation S-X of the Commission), if any, in the Partnership’s internal control over financial reporting or of all fraud, if any, whether or not material, involving management or other employees who have a role in the Partnership’s internal controls over financial reporting, in each case that occurred or existed, or was first detected, at any time during the three most recent fiscal years covered by the audited financial statements of the Partnership included in the Registration Statement, the General Disclosure Package and the Prospectus or at any time subsequent thereto.

 

(38)        Disclosure Controls.  The Partnership maintains disclosure controls and procedures (to the extent required by and as such term is defined in Rules 13a-15 and 15d-15 of the 1934 Act Regulations), that (i) are designed to provide reasonable assurance that material information relating to the Partnership, including its consolidated subsidiaries, is recorded, processed, summarized and communicated to the principal executive officer, the principal financial officer and other appropriate officers of the General Partner to allow for timely decisions regarding required disclosure, particularly during the periods in which the periodic reports required under the 1934 Act are being prepared; (ii) have been evaluated for effectiveness as of March 31, 2016; and (iii) are effective in all material respects to perform the functions for which they are established.

 

(39)        Compliance with the 1934 Act.  The Partnership is subject to and in full compliance with the reporting requirements of Section 13 or Section 15(d) of the 1934 Act. The documents incorporated or deemed to be incorporated by reference in the Prospectus at the time they were filed with the Commission complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission promulgated thereunder and, when read together with the other information in the Prospectus, do not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

15



 

(40)        Compliance with the Sarbanes-Oxley Act.  There is and has been no failure on the part of the Partnership, the General Partner or any of the General Partner’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act with which any of them is required to comply, including Section 402 related to loans and Sections 302 and 906 related to certifications.

 

(41)        Absence of Manipulation.  The Partnership Entities have not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Units.

 

(42)        Statistical and Market-Related Data.  Any statistical, demographic, market-related and similar data included in the Registration Statement, the General Disclosure Package or the Prospectus are based on or derived from sources that the Partnership and the General Partner believe to be reliable and accurate and accurately reflect the materials upon which such data is based or from which it was derived, and the Partnership and the General Partner have made available true, complete and correct copies of such materials to the Representatives.

 

(43)        Foreign Corrupt Practices Act.  Neither any Partnership Entity nor, to the knowledge of the Partnership, any director, officer, agent, employee, affiliate or other person acting on behalf of any Partnership Entity is aware of or has taken any action, directly or indirectly, that has resulted or would result in a violation by any such person of the FCPA, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Partnership Entities, and, to the knowledge of the Partnership, its other affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(44)        Money Laundering Laws.  The operations of the Partnership Entities are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Partnership Entities with respect to the Money Laundering Laws is pending or, to the knowledge of the Partnership, threatened.

 

(45)        OFAC.  None of the Partnership Entities nor, to the knowledge of the Partnership, any director, officer, agent, employee, affiliate or other person acting on

 

16



 

behalf of the General Partner, the Partnership or any of the Partnership’s subsidiaries is currently subject to any U.S. sanctions administered by OFAC; and neither the General Partner nor the Partnership will directly or indirectly use any of the proceeds from the sale of Units by the Partnership in the offering contemplated by this Agreement, or lend, contribute or otherwise make available any such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

(46)        ERISA ComplianceNone of the following events has occurred or exists: (A) a failure to fulfill the obligations, if any, under the minimum funding standards of Section 302 of ERISA with respect to a Plan determined without regard to any waiver of such obligations or extension of any amortization period; (B) an audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal, state or foreign governmental or regulatory agency with respect to the employment or compensation of employees by the Partnership Entities that might reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; or (C) any breach of any contractual obligation, or any violation of law or applicable qualification standards, with respect to the employment or compensation of employees by the Partnership Entities that might reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.  None of the following events has occurred or is reasonably likely to occur: (i) a material increase in the aggregate amount of contributions required to be made to all Plans in the current fiscal year of the Partnership Entities compared to the amount of such contributions made in the most recently completed fiscal year of the Partnership; (ii) a material increase in the “accumulated post-retirement benefit obligations” (within the meaning of Statement of Financial Accounting Standards 106) of the Partnership Entities compared to the amount of such obligations in the most recently completed fiscal year of the Partnership; (iii) any event or condition giving rise to a liability under Title IV of ERISA that might reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; or (iv) the filing of a claim by one or more employees or former employees of the Partnership Entities related to its or their employment that might reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.  For purposes of this paragraph and the definition of ERISA, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to which the General Partner, the Partnership or any of the Partnership’s subsidiaries may have any liability.

 

(47)        Changes in Management.  Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, none of the persons who were executive officers of the General Partner or the Partnership or directors of the General Partner as of the date of the Pre-Pricing Prospectus has given oral or written notice to the General Partner, the Partnership or any of the Partnership’s Subsidiaries of his or her resignation (or otherwise indicated to the Partnership Entities an intention to resign within the next twelve months), nor has any such officer or director been terminated by the General Partner or the Partnership or otherwise

 

17



 

removed from his or her office or from the board of directors, as the case may be (including, without limitation, any such termination or removal which is to be effective as of a future date) nor is any such termination or removal under consideration by the Partnership, the General Partner or the General Partner’s board of directors.

 

(48)        Related Party Transactions.  There are no business relationships or related party transactions involving the Partnership or any of its subsidiaries or, to the knowledge of the Partnership, any other person that are required to be described in the Pre-Pricing Prospectus or the Prospectus that have not been described as required.

 

(49)        Offering Materials.  Without limiting the provisions of Section 16 hereof, the Partnership Parties have not distributed and will not distribute, directly or indirectly (other than through the Underwriters), any “written communication” (as defined under Rule 405 under the 1933 Act) or other offering materials in connection with the offering or sale of the Units, other than the Pre-Pricing Prospectus, the Prospectus, any amendment or supplement to any of the foregoing and any Issuer Free Writing Prospectus (as defined in Section 15 hereof).

 

(50)        No Restrictions on Dividends.  None of the Partnership Entities is a party to or otherwise bound by any instrument or agreements that limits or prohibits or could limit or prohibit, directly or indirectly, the Partnership from paying any dividends or making other distributions on its Common Units, and no subsidiary of the Partnership is a party to or otherwise bound by any instrument or agreements that limits or prohibits or could limit or prohibit, directly or indirectly, any subsidiary of the Partnership from paying any dividends or making other distributions on its limited or general partnership interests, limited liability company interests, or other equity interest, as the case may be, or from repaying any loans or advances from, or (except for instruments or agreements that by their express terms prohibit the transfer or assignment thereof or of any rights thereunder) transferring any of its properties or assets to, the Partnership or any other subsidiary, in each case except as described in the Registration Statement, the General Disclosure Package and the Prospectus.

 

(51)        Brokers.  There is not a broker, finder or other party that is entitled to receive from the Partnership any brokerage or finder’s fee or other fee or commission as a result of any of the transactions contemplated by this Agreement.

 

(52)        XBRL. The interactive data in XBRL included as an exhibit to the Registration Statement or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

 

(b)                                 Certificates.  Any certificate signed by any officer of the General Partner (whether signed on behalf of such officer, the General Partner or the Partnership) and delivered to the Representatives or to counsel for the Underwriters shall be deemed a representation and warranty by the Partnership to the Underwriters as to the matters covered thereby.

 

18



 

SECTION 2.  Sale and Delivery to the Underwriters; Closing.

 

(a)                                 Initial Units.  On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Partnership agrees to sell to the Underwriters, severally and not jointly, the Initial Units, and each Underwriter, severally and not jointly, agrees to purchase the respective number of Initial Units set forth opposite its name in Schedule I hereto, in each case at a price per Common Unit as set forth on Schedule II hereto (the “Purchase Price”).

 

(b)                                 Option Units.  In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Partnership hereby grants to the Underwriters an option to purchase all or a portion of the Option Units at a price per Common Unit equal to the Purchase Price referred to in Section 2(a) above; provided that the price per Common Unit for any Option Units shall be reduced by an amount per unit equal to any dividends or distributions declared by the Partnership and payable or paid on the Initial Units but not payable on such Option Units.  The option hereby granted will expire at the close of business on the 30th day after the date hereof and may be exercised in whole or in part from time to time upon notice by the Representatives to the Partnership setting forth the number of Option Units as to which each Underwriter is then exercising its option and the time and date of payment and delivery for such Option Units.  Any such time and date of delivery (an “Option Closing Date”) shall be determined by the Representatives, but shall not be later than five full business days after the exercise of said option, nor in any event prior to the Closing Date.  If the option is exercised as to all or any portion of the Option Units, the Partnership will sell to the Underwriters the total number of Option Units then being purchased, and the Underwriters will purchase such Option Units.

 

(c)                                  Payment.  Payment of the purchase price for, and delivery of, the Initial Units shall be made at the offices Vinson & Elkins L.L.P. at 1001 Fannin Street, Suite 2500, Houston, TX 77002, or at such other place as shall be agreed upon by the Representatives and the Partnership, at 9:00 A.M. (New York City time) on February 22, 2017, or such other time not later than five business days after such date as shall be agreed upon by the Representatives and the Partnership (such time and date of payment and delivery being herein called the “Closing Date”).

 

In addition, in the event that any or all of the Option Units are purchased by the Underwriters, payment of the purchase price for, and delivery of, such Option Units shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representatives and the Partnership, on each Option Closing Date as specified in the notice from the Representatives to the Partnership.

 

Payment shall be made to the Partnership by wire transfer of immediately available funds to a single bank account designated by the Partnership against delivery to the Underwriters of the Units to be purchased by them.

 

(d)                                 Delivery of Units.  Delivery of the Initial Units and any Option Units shall be made through the facilities of DTC unless the Representatives shall otherwise instruct.

 

19



 

SECTION 3.  Covenants of the Partnership.

 

The Partnership covenants with the Underwriters as follows:

 

(a)                                 Compliance with Securities Regulations and Commission Requests.   The Partnership, subject to Section 3(b) hereof, will comply with the requirements of Rule 430B and Rule 433 and will notify the Representatives immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or when any preliminary prospectus, the Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement thereto shall have been filed, (ii) of the receipt of any comments from the Commission (together with a copy of any comment letters and any transcript of oral comments and any written responses thereto), (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to any preliminary prospectus or the Prospectus, or any document incorporated by reference therein or any Issuer Free Writing Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, the Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement to any of the foregoing, or any notice from the Commission objecting to the use of the form of the Registration Statement or any post-effective amendment thereto, or of the suspension of the qualification of the Units for offering or sale in any jurisdiction or of the loss or suspension of any exemption from any such qualification, or of the initiation or threatening of any proceedings for any of such purposes, or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement and (v) if the Partnership becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Units.  The Partnership will make every reasonable effort to prevent the issuance of any stop order and, if any such stop order is issued, to obtain the lifting thereof as soon as possible. The Partnership shall pay the required Commission filing fees relating to the Units within the time required by Rule 456(b)(1)(i) of the 1933 Act Regulations without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act Regulations, except to the extent such filing fees have been paid prior to the date hereof.

 

(b)                                 Filing of Amendments.  The Partnership will give the Representatives notice of its intention to file or prepare any amendment to the Registration Statement, any Issuer Free Writing Prospectus or any amendment, supplement or revision to any preliminary prospectus, the Prospectus or any Issuer Free Writing Prospectus, whether pursuant to the 1933 Act or otherwise, and the Partnership will furnish the Representatives with copies of any such documents within a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters shall object.  The Partnership has given the Representatives notice of any filings made pursuant to the 1934 Act within 48 hours prior to the Applicable Time. The Partnership will give the Representatives notice of its intention to make any filing pursuant to the 1934 Act from the Applicable Time through the Closing Date (or, if later, through the end of the period during which the Prospectus is required (or, but for the provisions of Rule 172, would be required) to be delivered by applicable law (whether to meet the requests of purchasers pursuant to Rule 173(d) or otherwise)) and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and

 

20



 

will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.

 

(c)                                  Delivery of Registration Statements.  The Partnership has furnished or will deliver to the Representatives and counsel for the Underwriters, without charge, copies of the Registration Statement and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein or otherwise deemed to be a part thereof) and copies of all consents and certificates of experts.

 

(d)                                 Delivery of Prospectuses.  The Partnership has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus and any amendments or supplements thereto as such Underwriter reasonably requested, and the Partnership hereby consents to the use of such copies for purposes permitted by the 1933 Act.  The Partnership will furnish to each Underwriter, without charge, during the period when the Prospectus is required (or, but for the provisions of Rule 172, would be required) to be delivered by applicable law (whether to meet the request of purchasers pursuant to Rule 173(d) or otherwise), such number of copies of the Pre-Pricing Prospectus, the Prospectus and any Issuer Free Writing Prospectus and any amendments or supplements thereto as such Underwriter may reasonably request. Each preliminary prospectus, the Prospectus, each Issuer Free Writing Prospectus and any amendments or supplements thereto furnished to the Underwriters were and will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

(e)                                  Continued Compliance with Securities Laws.  The Partnership will comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Units as contemplated in this Agreement and in the General Disclosure Package and the Prospectus.  If at any time when a prospectus is required (or, but for the provisions of Rule 172, would be required) by applicable law to be delivered in connection with sales of the Units (whether to meet the request of purchasers pursuant to Rule 173(d) or otherwise), any event shall occur or condition shall exist as a result of which it is necessary (or if the Representatives or counsel for the Underwriters shall notify the Partnership that, in their judgment, it is necessary) to amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus so that the Registration Statement, the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made or then prevailing, not misleading or if it is necessary (or, if the Representatives or counsel for the Underwriters shall notify the Partnership that, in their judgment, it is necessary) to amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus in order to comply with the requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, the Partnership will promptly notify the Representatives and will promptly prepare and file with the Commission, subject to Section 3(b) hereof, such amendment or supplement as may be necessary to correct such untrue statement or omission or to comply with such requirements, the Partnership will use its best efforts to have such amendment declared or become effective as soon as practicable and the Partnership will furnish to each Underwriter such number of copies of such amendment or supplement as such

 

21



 

Underwriter may reasonably request.  If at any time an Issuer Free Writing Prospectus conflicts with the information contained in the Registration Statement or if an event shall occur or condition shall exist as a result of which it is necessary (or if the Representatives or counsel for the Underwriters shall notify the Partnership that, in its judgment, it is necessary) to amend or supplement such Issuer Free Writing Prospectus so that it will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made or then prevailing, not misleading, or if it is necessary (or, if the Representatives or counsel for the Underwriters shall notify the Partnership that, in their judgment, it is necessary) to amend or supplement such Issuer Free Writing Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Partnership will promptly notify the Representatives and will promptly prepare and, if required by the 1933 Act or the 1933 Act Regulations, file with the Commission, subject to Section 3(b) hereof, such amendment or supplement as may be necessary to eliminate or correct such conflict, untrue statement or omission or to comply with such requirements, and the Partnership will furnish to each Underwriter such number of copies of such amendment or supplement as such Underwriter may reasonably request.

 

(f)                                   Blue Sky Qualifications.  The Partnership will use its best efforts, in cooperation with the Underwriters, to qualify the Units for offering and sale, or to obtain an exemption for the Units to be offered and sold, under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representatives may designate and to maintain such qualifications and exemptions in effect for so long as required for the distribution of the Units (but in no event less than one year from the date of this Agreement); provided, however, that the Partnership shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.  In each jurisdiction in which the Units have been so qualified or exempt, the Partnership will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification or exemption for so long as required for the distribution of the Units (but in no event for less than one year from the date of this Agreement).

 

(g)                                  Rule 158.  The Partnership will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

 

(h)                                 Use of Proceeds.  The Partnership will use the net proceeds received by it from the sale of the Units in the manner specified in the Pre-Pricing Prospectus and the Prospectus under “Use of Proceeds.”

 

(i)                                     Listing.   The Partnership will use its best efforts to effect the listing of the Units on the NYSE as and when required by this Agreement.

 

(j)                                    Restriction on Sale of Common Units.  During the Lock-Up Period, the Partnership Entities will not, without the prior written consent of the Representatives, directly or indirectly:

 

22



 

(i)             offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any Common Units, other equity securities of the Partnership or any securities convertible into or exercisable or exchangeable for Common Units or other equity securities of the Partnership, except that the Partnership may issue Common Units or any securities convertible or exchangeable into Common Units as payment of any part of the purchase price for businesses that are acquired by the Partnership or its subsidiaries; provided that any recipient of such Common Units must agree in writing to be bound by the terms of this Section 3(j) for the remaining term of the Lock-Up Period,

 

(ii)          file or cause the filing of any registration statement under the 1933 Act with respect to any Common Units, other equity securities of the Partnership or any securities convertible into or exercisable or exchangeable for any Common Units or other equity securities of the Partnership (other than (1) any registration statement on Form S-8 to register Common Units or options to purchase Common Units pursuant to the NGL Energy Partners LP 2011 Long-Term Incentive Plan described in the Pre-Pricing Prospectus and the Prospectus (the “LTIP”) and (2) any registration statement in connection with the entrance by the Partnership into a definitive agreement relating to the acquisition of a business as contemplated by Section 3(j)(i)),

 

(iii)       enter into any swap or other agreement, arrangement or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of any Common Units, other equity securities or any securities convertible into or exercisable or exchangeable for any Common Units or other equity securities of the Partnership,

 

whether any transaction described in clause (i) or (iii) above is to be settled by delivery of Common Units, other equity securities, in cash or otherwise, or publicly announce any intention to do any of the foregoing.  During the Lock-Up Period, the Partnership and the General Partner shall not permit or grant any waiver of the Partnership’s securities trading policies with respect to any trading window or blackout period, which waiver would allow any officer or director of the Partnership to offer, pledge, sell or otherwise transfer or dispose of any Common Units.

 

Notwithstanding the provisions set forth in the immediately preceding paragraph, the Partnership may, without the prior written consent of the Representatives:

 

(1)                                 issue the Units to the Underwriters pursuant to this Agreement,

 

(2)                                 issue Common Units, other equity securities of the Partnership or any securities convertible into or exercisable or exchangeable for any Common Units or other equity securities of the Partnership and options to purchase Common Units, pursuant to the LTIP or any other equity incentive plans described in the General Disclosure Package and the Prospectus, if the terms of such equity incentive plans are substantially the same as the form filed as part of the Registration Statement,

 

23



 

(3)                                 issue Common Units upon the exercise of options outstanding on the date of this Agreement or issued after the date of this Agreement under the LTIP or any other equity incentive plans referred to in clause (2) above, and

 

(4)                                 issue or withhold any Common Units upon the vesting of any outstanding equity award granted pursuant to the LTIP or any other equity incentive plans described in the General Disclosure Package and the Prospectus,

 

provided, however, that in the case of any issuance described in clause (3) above, it shall be a condition to the issuance that each recipient executes and delivers to the Representatives, not later than one business day prior to the date of such issuance, a written agreement, in substantially the form of Exhibit C hereto to this Agreement and otherwise satisfactory in form and substance to the Representatives.

 

(k)                                 Reporting Requirements.  The Partnership, during the period when the Prospectus is required (or, but for the provisions of  Rule 172, would be required) by applicable law to be delivered (whether to meet the request of purchasers pursuant to Rule  173(d) or otherwise), will file all documents required to be filed with the Commission pursuant to the 1934 Act and the 1934 Act Regulations within the time periods required by the 1934 Act and the 1934 Act Regulations.

 

(l)                                     Preparation of Prospectus.  Immediately following the execution of this Agreement, the Partnership will, subject to Section 3(b) hereof, prepare the Prospectus, which shall contain the selling terms of the Units, the plan of distribution thereof and such other information as may be required by the 1933 Act or the 1933 Act Regulations or as the Representatives and the Partnership may deem appropriate, and, if requested by the Representatives, will prepare the Issuer Free Writing Prospectus containing the information set forth in Exhibit F hereto and such other information as may be required by Rule 433 or as the Representatives and the Partnership may deem appropriate, and will file or transmit for filing with the Commission, in accordance with the provisions of Rule 430B and in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), the Prospectus and any such Issuer Free Writing Prospectus.

 

(m)                             Stop Transfer Instructions.  The Partnership will, with respect to any Common Units (other than the Units to be sold pursuant to this Agreement) or any securities convertible into or exercisable or exchangeable for Common Units owned or held (of record or beneficially) by any of the persons who have entered into or are required to enter into an agreement in the form of Exhibit C hereto, instruct the transfer agent or other registrar to enter stop transfer instructions and implement stop transfer procedures with respect to such securities during the Lock-Up Period; and, during the Lock-Up Period, neither the Partnership nor the General Partner will cause or permit any waiver, release, modification or amendment of any such stop transfer instructions or stop transfer procedures without the prior written consent of the Representatives.

 

SECTION 4.  Payment of Expenses.

 

(a)                                 Expenses.  The Partnership will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement and each amendment thereto (in each case including exhibits) and any

 

24



 

costs associated with electronic delivery of any of the foregoing, (ii) the word processing and delivery to the Underwriters of this Agreement and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Units, (iii) the preparation of the certificates for the Units and the issuance and delivery of the Units to the Underwriters, including any stock or other transfer taxes and any stamp or other taxes or duties payable in connection with the sale, issuance or delivery of the Units to the Underwriters, (iv) the fees and disbursements of the counsel, accountants and other advisors to the Partnership, (v) the qualification of the Units under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplements thereto, (vi) the preparation, printing and delivery to the Underwriters of copies of each preliminary prospectus, any Permitted Free Writing Prospectus and the Prospectus and any amendments or supplements thereto and any costs associated with electronic delivery of any of the foregoing, (vii) the preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any supplements thereto and any costs associated with electronic delivery of any of the foregoing, (viii) the fees and expenses of the transfer agent and registrar for the Units, (ix) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review, if any, by FINRA of the terms of the sale of the Units, (x) the fees and expenses incurred in connection with the listing of the Units on the NYSE, and (xi) the costs and expenses of the Partnership and any of its officers, directors, counsel or other representatives in connection with presentations or meetings undertaken in connection with the offering of the Units, including, without limitation, expenses associated with the production of road show slides and graphics and the production and hosting of any electronic road shows.

 

(b)                                 Termination of Agreement.  If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5 and Section 9(a)(i) hereof, the Partnership shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.

 

SECTION 5.  Conditions of Underwriters’ Obligations.

 

The obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties of the Partnership contained in this Agreement, or in certificates signed by any officer of the General Partner or the Partnership (whether signed on behalf of such officer, the General Partner or the Partnership) delivered to the Representatives or counsel for the Underwriters, to the performance by the Partnership of its covenants and other obligations hereunder, and to the following further conditions:

 

(a)                                 Effectiveness of Registration Statement.  The Registration Statement shall have become effective and no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or, to the knowledge of the Partnership, threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Representatives.  The Prospectus shall have been filed with the Commission in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8))

 

25



 

and each Issuer Free Writing Prospectus required to be filed with the Commission shall have been filed in the manner and within the time period required by Rule 433.

 

(b)                                 Opinion of Counsel for Partnership.  At the Closing Date, the Representatives shall have received the opinion, dated as of the Closing Date, of Winston & Strawn LLP, counsel for the Partnership, in form and substance satisfactory to the counsel for the Underwriters, to the effect set forth in Exhibit D hereto and to such further effect as the Representatives or counsel to the Underwriters may reasonably request.

 

(c)                                  Opinion of Counsel for Underwriters.  At the Closing Date, the Representatives shall have received the opinion, dated as of the Closing Date, of Vinson & Elkins L.L.P., counsel for the Underwriters, in form and substance reasonably satisfactory to the Representatives, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters.

 

(d)                                 Officers’ Certificate.  At the Closing Date or the applicable Option Closing Date, as the case may be, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus (in each case exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), any material adverse change or any development that could reasonably be expected to result in a material adverse change in the condition  (financial or other), results of operations, business, properties, management or prospects of the Partnership and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business, and, at the Closing Date, the Representatives shall have received a certificate, signed on behalf of the Partnership by the President, the Chief Executive Officer or an Executive Vice President of the General Partner and the Chief Financial Officer or Chief Accounting Officer of the General Partner, dated as of the Closing Date, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties of the Partnership in this Agreement are true and correct at and as of the Closing Date with the same force and effect as though expressly made at and as of the Closing Date, (iii) the Partnership has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date under or pursuant to this Agreement, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Partnership, are contemplated by the Commission.

 

(e)                                  Accountants’ Comfort Letters.  At the time of the execution of this Agreement, the Representatives shall have received (i) from Grant Thornton LLP, a letter, dated the date of this Agreement and in form and substance satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the Partnership Financial Statements contained in the Registration Statement, the General Disclosure Package, any Issuer Free Writing Prospectuses (other than any electronic road show) and the Prospectus and any amendments or supplements thereto and (ii) KPMG LLP, a letter, dated the date of this Agreement and in form and substance satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the Gavilon Financial Statements contained in the Registration Statement, the General Disclosure Package, any Issuer Free Writing

 

26



 

Prospectuses (other than any electronic road show) and the Prospectus and any amendments or supplements thereto.

 

(f)                                   Bring-down Comfort Letter.  At the Closing Date, the Representatives shall have received (i) from Grant Thornton LLP, a letter, dated as of the Closing Date and in form and substance satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e)(i) of this Section 5, except that the specified date referred to shall be a date not more than three business days prior to the Closing Date and (ii) from KPMG LLP, a letter, dated as of the Closing Date and in form and substance satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e)(ii) of this Section 5, except that the specified date referred to shall be a date not more than three business days prior to the Closing Date.

 

(g)                                  Approval of Listing.  At the Closing Date and each Option Closing Date, if any, the Units shall have been approved for listing on the NYSE, subject only to official notice of issuance.

 

(h)                                 Lock-Up Agreements.  Prior to the date of this Agreement, the Representatives shall have received an agreement substantially in the form of Exhibit C hereto signed by each of the persons listed in Exhibit B hereto.

 

(i)                                     No Objection.  Prior to the date of this Agreement, FINRA shall have confirmed in writing that it has no objection with respect to the fairness and reasonableness of the underwriting terms and arrangements or it shall have been determined that no FINRA filing is required in connection with the transactions contemplated by this Agreement.

 

(j)                                    Conditions to Purchase of Option Units.  In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Units on any Option Closing Date that is after the Closing Date, the obligations of the Underwriters to purchase the applicable Option Units shall be subject to the conditions specified in the introductory paragraph of this Section 5 and to the further condition that, at the applicable Option Closing Date, the Representatives shall have received:

 

(1)                                 Opinion of Counsel for Partnership.  The opinion of Winston & Strawn LLP, counsel for the Partnership, in form and substance satisfactory to the counsel for the Underwriters and dated such Option Closing Date, relating to the Option Units to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(b) hereof.

 

(2)                                 Opinion of Counsel for Underwriters.  The opinion of Vinson & Elkins L.L.P., counsel for the Underwriters, dated such Option Closing Date, relating to the Option Units to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(c) hereof.

 

(3)                                 Officers’ Certificate.  A certificate, dated such Option Closing Date, to the effect set forth in, and signed on behalf of the Partnership by two of the officers specified in Section 5(d) hereof, except that the references in such certificate to the Closing Date shall be changed to refer to such Option Closing Date.

 

27



 

(4)                                 Bring-down Comfort Letter.  A letter from each of (i) Grant Thornton LLP, in form and substance satisfactory to the Representatives and dated such Option Closing Date, substantially in the same form and substance as the letter furnished to the Representatives pursuant to Section 5(f)(i) hereof and (ii) KPMG LLP, in form and substance satisfactory to the Representatives and dated such Option Closing Date, substantially in the same form and substance as the letter furnished to the Representatives pursuant to Section 5(f)(ii) hereof, except that in each case the “specified date” in the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Option Closing Date, and except that in each case the “specified date” in the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Option Closing Date, and except that such letter shall cover any amendments or supplements to the Registration Statement, any Issuer Free Writing Prospectus (other than any electronic road show) and the Prospectus subsequent to the Closing Date.

 

(k)                                 Additional Documents.  At the Closing Date and each Option Closing Date, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Units as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, contained in this Agreement, or as the Representatives or counsel for the Underwriters may otherwise reasonably request; and all proceedings taken by the Partnership in connection with the issuance and sale of the Units as herein contemplated and in connection with the other transactions contemplated by this Agreement shall be satisfactory in form and substance to the Representatives and counsel for the Underwriters.

 

(l)                                     Termination of Agreement.  If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Units on an Option Closing Date which is after the Closing Date, the obligations of the Underwriters to purchase the relevant Option Units on such Option Closing Date, may be terminated by the Representatives by notice to the Partnership at any time on or prior to the Closing Date or such Option Closing Date, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 hereof and except that Sections 1, 6, 7, 8, 9, 0, 11, 12, 13, 14, 15, 17, 18 and 19 hereof shall survive any such termination of this Agreement and remain in full force and effect.

 

SECTION 6.  Indemnification.

 

(a)                                 Indemnification by the Partnership Entities.  The Partnership agrees to indemnify and hold harmless each Underwriter, each of their respective affiliates and each of its and their respective officers, directors, employees, partners, members and agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

 

(i)             against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission

 

28



 

or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement to any of the foregoing), or any “issuer information” (as defined in Rule 433) filed or required to be filed pursuant to Rule 433(d), or any “road show” (as defined in Rule 433) that does not constitute an Issuer Free Writing Prospectus, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(ii)          against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Partnership; and

 

(iii)       against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above,

 

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Partnership by the Representatives expressly for use in the Registration Statement (or any amendment thereto), or in any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or in any amendment or supplement to any of the foregoing), or any “issuer information” (as defined in Rule 433) filed or required to be filed pursuant to Rule 433(d), or any “road show” (as defined in Rule 433) that does not constitute an Issuer Free Writing Prospectus, it being understood and agreed that the only such information furnished by the Representatives as aforesaid consists of the information described as such in Section 6(b) hereof.

 

(b)                                 Indemnification by the Underwriters.  Each Underwriter agrees to indemnify and hold harmless the Partnership, the directors and each of the officers of the General Partner who signed the Registration Statement and each person, if any, who controls the Partnership within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 6, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), or the Pre-Pricing Prospectus, any other preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement to any of the foregoing), or any “issuer information” (as defined in Rule 433) filed or required to be filed pursuant to Rule 433(d), or any “road show” (as defined in Rule 433) that does not constitute an Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Partnership by such Underwriter expressly for use therein.  The Partnership hereby acknowledges and agrees that the information furnished to the Partnership by the Underwriters expressly for use in the Registration Statement (or any amendment thereto), in any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement

 

29



 

to any of the foregoing), or any “issuer information” (as defined in Rule 433) filed or required to be filed pursuant to Rule 433(d), or any “road show” (as defined in Rule 433) that does not constitute an Issuer Free Writing Prospectus, consists exclusively of the sentence on the cover page of the Pre-Pricing Prospectus and the Prospectus relating to the delivery of the Units and the following information appearing in the Pre-Pricing Prospectus and the Prospectus under the following captions: paragraph one under the caption “Underwriting—Commissions and Discounts,” “Underwriting—Price Stabilization and Short Positions” and paragraph three under the caption “Underwriting—Other Relationships.”

 

(c)                                  Actions Against Parties; Notification.  Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement.  In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel appointed by the indemnifying party at the indemnifying party’s expense (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as expressly set forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding anything otherwise provided herein, the indemnified party shall have the right to employ one separate counsel (in addition to any local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party.  No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7

 

30



 

hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(d)                                 Settlement Without Consent if Failure to Reimburse.  If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by this Section 6, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

SECTION 7.  Contribution.

 

If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Partnership on the one hand and the Underwriters on the other hand from the offering of the Units pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Partnership on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

 

The relative benefits received by the Partnership on the one hand and the Underwriters on the other hand in connection with the offering of the Units pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Units pursuant to this Agreement (before deducting expenses) received by the Partnership and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Units as set forth on such cover.

 

The relative fault of the Partnership on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Partnership on the one hand or by the Underwriters on the other hand and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

31



 

The Partnership and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7.  The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

 

Notwithstanding the provisions of this Section 7, the Underwriters shall not be required to contribute any amount in excess of the amount by which the total price at which the Units underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that the Underwriters has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.

 

No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 7, each officer, director, employee, partner, member, agent and affiliate of any Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the General Partner, each officer of the General Partner who signed the Registration Statement, and each person, if any, who controls the Partnership within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Partnership.

 

SECTION 8.  Representations, Warranties and Agreements to Survive Delivery.

 

All representations, warranties and agreements contained in this Agreement or in certificates signed by any officer of the General Partner (whether signed on behalf of such officer, the General Partner or the Partnership) and delivered to the Representatives or counsel to the Underwriters, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriters, any officer, director, employee, partner, member, agent or affiliate of the Underwriters or any person controlling the Underwriters, or by or on behalf of the Partnership, any officer, director or employee of the General Partner or any person controlling the Partnership, and shall survive delivery of and payment for the Units.

 

SECTION 9.  Termination of Agreement.

 

(a)                                 Termination; General.  The Representatives may terminate this Agreement, by notice to the Partnership, at any time on or prior to the Closing Date (and, if any Option Units are to be purchased on an Option Closing Date which occurs after the Closing Date, the Representatives may terminate any obligation to purchase such Option Units, by notice to the Partnership at any time on or prior to such Option Closing Date) (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is

 

32



 

given in the General Disclosure Package or the Prospectus (in each case exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), any material adverse change, or any development that could reasonably expected to result in a material adverse change, in the condition (financial or other), results of operations, business, properties, management or prospects of the Partnership Entities taken as a whole, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any declaration of a national emergency or war by the United States, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions (including, without limitation, as a result of terrorist activities), in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to market the Units or to enforce contracts for the sale of the Units, or (iii) if trading in any securities of the Partnership has been suspended or materially limited by the Commission or the NYSE, or if trading generally on the NYSE, the Nasdaq Global Select Market, the Nasdaq Global Market, the NYSE MKT, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by order of the Commission, FINRA or any other governmental authority, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or in Europe, or (iv) if a banking moratorium has been declared by either Federal or New York authorities or (v) if there shall have occurred, since the time of execution of this Agreement, any downgrading in the rating of any debt securities of the Partnership, or of the securities of any subsidiary or subsidiary trust of the Partnership, by any “nationally recognized statistical rating organization” (as defined by the Commission for purposes of Rule 436 under the 1933 Act) or any public announcement that any such organization has placed its rating on the Partnership or any such debt securities under surveillance or review or on a so-called “watch list” (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) or any announcement by any such organization that the Partnership or any such debt securities has been placed on negative outlook.

 

(b)                                 Liabilities.  If this Agreement is terminated pursuant to this Section 9, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 9, 0, 11, 12, 13, 14, 15, 17, 18 and 19 hereof shall survive such termination and remain in full force and effect.

 

SECTION 9A. Defaulting Underwriter.

 

(a)    If, on the Closing Date, any one or more of the Underwriters defaults on its or their obligation to purchase Units that it or they have agreed to purchase hereunder, and the aggregate principal amount of Units that such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not exceed one-tenth of the aggregate amount of Units to be purchased on the Closing Date, the other Underwriters shall be obligated, severally, in the proportions that the principal amount of Units set forth opposite their respective names on Schedule I bears to the aggregate principal amount of Units set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the Underwriters with the

 

33



 

consent of the non-defaulting Underwriters, to purchase the Units that such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on the Closing Date; provided that in no event shall the amount of Units that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 9A by an amount in excess of one-ninth of such amount of Units without the written consent of such Underwriter.

 

(b)      If any one or more of the Underwriters shall fail or refuse to purchase Units and the aggregate number of Units which it or they have agreed to purchase hereunder on the Closing Date and the aggregate principal amount of Units with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Units to be purchased on Closing Date, and arrangements satisfactory to the Underwriters and the Partnership for the purchase of such Units are not made within 48 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or of the Partnership Entities.  In any such case either the Underwriters or the Partnership Entities shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Prospectus or in any other documents or arrangements may be effected.

 

(c)     Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Partnership Entities or any non-defaulting Underwriter for damages caused by its default.

 

SECTION 10.  Notices.

 

All notices and other communications hereunder shall be in writing, shall be effective only upon receipt and shall be mailed, delivered by hand or overnight courier, transmitted by fax (with the receipt of such fax to be confirmed by telephone) or, in the case of any notice given under Section 2(b) hereof, by email correspondence if receipt of such correspondence is actually acknowledged, other than via auto-reply.  Notices to Credit Suisse shall be directed to Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010-3629, notices to Wells Fargo shall be directed to Wells Fargo Securities, LLC, 375 Park Avenue, New York, New York 10152, Attention: Equity Syndicate Department; Fax: (212) 214-5918, and notices to the Partnership shall be directed to it at 6120 South Yale Avenue, Suite 805, Tulsa, Oklahoma 74136, Attention:  Chief Executive Officer, Email: Michael.krimbill@nglep.com.

 

SECTION 11.  Parties.

 

This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Partnership.  Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Partnership and their respective successors and the controlling persons and other indemnified parties referred to in Sections 6 and 7 hereof and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained.  This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Partnership and their respective successors, and said controlling persons and other indemnified parties and their heirs and legal representatives, and for the benefit of no other person or entity.  No purchaser of Units from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

 

34



 

SECTION 12.  Compliance with USA PATRIOT Act.

 

In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their clients, including the Partnership, which information may include the name and address of their clients, as well as other information that will allow the Underwriters to properly identify their clients.

 

SECTION 13.  GOVERNING LAW AND TIME.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

 

SECTION 14.  Effect of Headings.

 

The Section and Exhibit headings herein are for convenience only and shall not affect the construction hereof.

 

SECTION 15.  Definitions.

 

As used in this Agreement, the following terms have the respective meanings set forth below:

 

Applicable Time” means the time and date set forth on Schedule II hereto or such other time as agreed by the Partnership and the Representatives.

 

Commission” means the Securities and Exchange Commission.

 

Credit Agreementmeans the Amended and Restated Credit Agreement, dated as of February 14, 2017, by and among NGL Energy Operating LLC, the other subsidiary borrowers party thereto, the Partnership, Deutsche Bank Trust Company Americas, as administrative agent, and the other financial institutions party thereto, as amended, supplemented or otherwise modified.

 

DTC” means The Depository Trust Company.

 

EDGAR” means the Commission’s Electronic Data Gathering, Analysis and Retrieval System.

 

ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder.

 

FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.

 

FINRA” means the Financial Industry Regulatory Authority, Inc.

 

35



 

GAAP” means generally accepted accounting principles.

 

General Partner Agreement” means the Third Amended and Restated Limited Liability Company Agreement of NGL Energy Holdings LLC, as amended, supplemented or otherwise modified.

 

Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Units that (a) is required to be filed with the Commission by the Partnership, (b) is a “road show” that is a “written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (c) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Units or of the offering that does not reflect the final terms, and all free writing prospectuses that are listed in Exhibit F hereto, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Partnership’s records pursuant to Rule 433(g).

 

Lien” means any security interest, mortgage, pledge, lien, encumbrance, claim or equity.

 

Lock-Up Period” means the period beginning on and including the date of this Agreement through and including the date that is the 45th day after the date of this Agreement.

 

Management GP Members” means EMG I NGL GP Holdings, LLC, EMG II NGL GP Holdings, LLC, Coady Enterprises, LLC, KrimGP2010, LLC, Krimbill Capital Group, LLC, Thorndike, LLC, and V E Properties XI, LLC.

 

Management Partners” means Bryan Guderian, H. Michael Krimbill, KrimGP2010 LLC, Krim2010, LLC, Krimbill Enterprises LP, Krimbill Enterprises LP, James Kneale, Robert W. Karlovich III, Shawn Coady, Coady Enterprises, LLC, SWC Family Partnership LP, 2012 Shawn W. Coady Irrevocable Insurance Trust, Todd M. Coady, Tara Nicole Coady Trust II, Colleen Blair Coady Trust, TMC Family Partnership LP, 2012 Todd M. Coady Irrevocable Insurance Trust, Thorndike, LLC, Stephen Cropper, Donna L. Cropper Revocable Living Trust, James Collingsworth, Vincent Osterman, AO Energy Inc., Milford Propane Inc., Osterman Propane Inc., E. Osterman, Inc., The Osterman Family Foundation, E. Osterman Gas Services, Inc., E. Osterman Propane Inc., Propane Gas, LLC, Saveway Propane Gas Services, Inc., John T. Raymond and Patrick Wade.

 

Note Purchase Agreementmeans the Note Purchase Agreement, dated June 19, 2012, by and among NGL Energy Partners LP and the purchasers named therein, as amended, supplemented or otherwise modified.

 

NYSE” means the New York Stock Exchange.

 

OFAC” means the Office of Foreign Assets Control of the U.S. Treasury Department.

 

Organizational Documents” means: (a) in the case of a corporation, its charter and by-laws; (b) in the case of a limited or general partnership, its partnership certificate, certificate of formation or similar organizational document and its partnership agreement; (c) in the case of a limited liability company, its articles of organization, certificate of formation or similar organizational documents and its operating agreement, limited liability company agreement,

 

36



 

membership agreement or other similar agreement; (d) in the case of a trust, its certificate of trust, certificate of formation or similar organizational document and its trust agreement or other similar agreement; and (e) in the case of any other entity, the organizational and governing documents of such entity.

 

Partnership Agreement” means the Third Amended and Restated Agreement of Limited Partnership of NGL Energy Partners LP, as amended, supplemented or otherwise modified.

 

Partnership Documents” means (a) all Subject Instruments and (b) all other contracts, indentures, mortgages, deeds of trust, loan or credit agreements, bonds, notes, debentures, evidences of indebtedness, swap agreements, leases or other instruments or agreements to which the Partnership or any of its subsidiaries is a party or by which the Partnership or any of its subsidiaries is bound or to which any of the property or assets of the Partnership or any of its subsidiaries is subject that solely in the case of this clause (b), are material with respect to the Partnership and its subsidiaries taken as a whole.

 

preliminary prospectus” means any prospectus together with, if applicable, the accompanying prospectus supplement used in connection with the offering of the Units that omitted the public offering price of the Units or that was captioned “Subject to Completion,” together with the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act. The term “preliminary prospectus” includes, without limitation, the Pre-Pricing Prospectus.

 

Registration Statement” means the Partnership’s registration statement on Form S—3 (Registration No. 333-216079), as amended (if applicable), including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S—3 under the 1933 Act and the Rule 430B Information; provided that any Rule 430B Information shall be deemed part of the Registration Statement only from and after the time specified pursuant to Rule 430B.

 

Repayment Event” means any event or condition that (a) gives the holder of any bond, note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Partnership or any subsidiary of the Partnership, or (b) gives any counterparty (or any person acting on such counterparty’s behalf) under any swap agreement or similar agreement or instrument to which the Partnership or any subsidiary of the Partnership is a party the right to liquidate or accelerate the payment obligations, or designate an early termination date under such agreement or instrument, as the case may be.

 

Rule 163,” “Rule 164,” “Rule 172,” “Rule 173(d),” “Rule 401(g)(2),” “Rule 405,” “Rule 424(b),” “Rule 430B” and “Rule 433” refer to such rules under the 1933 Act.

 

Rule 430B Information” means the information included in the Prospectus or any amendment or supplement thereto, that was omitted from the Registration Statement at the time it became effective but that is deemed to be a part of the Registration Statement at the time it became effective pursuant to Rule 430B.

 

37



 

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder or implementing the provisions thereof.

 

Specified GP Holders” means the Management GP Members, EMG I NGL GP Holdings, LLC, a Delaware limited liability company, EMG II NGL GP Holdings, LLC, a Delaware limited liability company, and each of their respective affiliates.

 

Subject Instruments” means the Credit Agreement and all other instruments, agreements and documents filed as exhibits to the Registration Statement pursuant to Rule 601(b)(10) of Regulation S-K of the Commission; provided that if any instrument, agreement or other document filed as an exhibit to the Registration Statement as aforesaid has been redacted or if any portion thereof has been deleted or is otherwise not included as part of such exhibit (whether pursuant to a request for confidential treatment or otherwise), the term “Subject Instruments” shall nonetheless mean such instrument, agreement or other document, as the case may be, in its entirety, including any portions thereof which shall have been so redacted, deleted or otherwise not filed.

 

1933 Act” means the Securities Act of 1933, as amended.

 

1933 Act Regulations” means the rules and regulations of the Commission under the 1933 Act.

 

1934 Act” means the Securities Exchange Act of 1934, as amended.

 

1934 Act Regulations” means the rules and regulations of the Commission under the 1934 Act.

 

1940 Act” means the Investment Company Act of 1940, as amended.

 

All references in this Agreement to the Registration Statement, any preliminary prospectus, the Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the version thereof filed with the Commission pursuant to EDGAR and all versions thereof delivered (physically or electronically) to the Underwriters.

 

All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement, any preliminary prospectus or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in or otherwise deemed by 1933 Act to be a part of or included in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be, including any document filed under the 1934 Act which is incorporated by reference in or otherwise deemed by 1933 Act to be a part of or included in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be.

 

38



 

SECTION 16.  Permitted Free Writing Prospectuses.

 

The Partnership represents, warrants and agrees that it has not made and, unless it obtains the prior written consent of the Representatives, it will not make, and each Underwriter represents, warrants and agrees that it has not made and, unless it obtains the prior written consent of the Partnership and the Representatives, it will not make, any offer relating to the Units that constitutes or would constitute an “issuer free writing prospectus” (as defined in Rule 433) or that otherwise constitutes or would constitute a “free writing prospectus” (as defined in Rule 405) or portion thereof required to be filed with the Commission or, in the case of the Partnership, whether or not required to be filed with the Commission; provided that the prior written consent of the Partnership and the Representatives shall be deemed to have been given in respect of the Issuer Free Writing Prospectuses, if any, listed on Exhibit F hereto and to any electronic road show in the form previously provided by the Partnership to and approved by the Representatives.  Any such free writing prospectus consented to or deemed to have been consented to as aforesaid is hereinafter referred to as a “Permitted Free Writing Prospectus.”  The Partnership represents, warrants and agrees that it has treated and will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rules 164 and 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. For the purposes of clarity, the parties hereto agree that all free writing prospectuses, if any, listed in Exhibit F hereto are Permitted Free Writing Prospectuses.

 

SECTION 17.  Absence of Fiduciary Relationship.

 

The Partnership acknowledges and agrees that:

 

(a)                                 each Underwriter is acting solely as an underwriter in connection with the sale of the Units and no fiduciary, advisory or agency relationship between the Partnership, on the one hand, and each Underwriter, on the other hand, has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether such Underwriter has advised or is advising the Partnership Entities on other matters;

 

(b)                                 the public offering price of the Units and the price to be paid by the Underwriters for the Units set forth in this Agreement were established by the Partnership following discussions and arm’s-length negotiations with the Representatives;

 

(c)                                  it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;

 

(d)                                 it is aware that the Underwriters and their affiliates are engaged in a broad range of transactions that may involve interests that differ from those of the Partnership and that the Underwriters have no obligation to disclose such interests and transactions to the Partnership by virtue of any fiduciary, advisory or agency relationship; and

 

(e)                                  it waives, to the fullest extent permitted by law, any claims it may have against the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the Underwriters shall have no liability (whether direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on

 

39



 

its behalf  or in right of it or the Partnership, including unitholders, employees or creditors of Partnership Entities.

 

SECTION 18.  Research Analyst Independence.

 

The Partnership acknowledges that the Underwriters’ research analysts and research departments are required to be independent from their investment banking divisions and are subject to certain regulations and internal policies, and that the Underwriters’ research analysts may hold views and make statements or investment recommendations and/or publish research reports with respect to the Partnership and/or the offering that differ from the views of their investment banking divisions.  The Partnership hereby waives and releases, to the fullest extent permitted by applicable law, any claims that the Partnership Entities may have against the Underwriters with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Partnership Entities by the Underwriters’ investment banking divisions.  The Partnership acknowledges that each of the Underwriters is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the companies that may be the subject of the transactions contemplated by this Agreement.

 

SECTION 19.  Consent to Jurisdiction.

 

The Partnership hereby submits to the non-exclusive jurisdiction of any U.S. federal or state court located in the Borough of Manhattan, the City and County of New York in any action, suit or proceeding arising out of or relating to or based upon this Agreement or any of the transactions contemplated hereby, and irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding in any such court and agree not to plead or claim in any such court that any such action, suit or proceeding has been brought in an inconvenient forum.

 

[Signature Page Follows]

 

40



 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Partnership a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Partnership in accordance with its terms.

 

 

 

Very truly yours,

 

 

 

NGL ENERGY PARTNERS LP

 

 

 

By:

NGL Energy Holdings LLC,

 

 

its general partner

 

 

 

 

 

 

 

By

/s/ H. Michael Krimbill

 

 

Name:

H. Michael Krimbill

 

 

Title:

Chief Executive Officer

 

[Signature page to Underwriting Agreement]

 



 

CONFIRMED AND ACCEPTED, as of the date first above written:

 

 

Credit Suisse Securities (USA) LLC

 

 

 

 

 

 

 

By:

/s/ John Ciolek

 

Name:

John Ciolek

 

Title:

Managing Director

 

 

 

 

Wells Fargo Securities, LLC

 

 

 

 

 

 

 

By:

/s/ David Herman

 

Name:

David Herman

 

Title:

Director

 

 

For themselves and as Representatives of the Underwriters named in Schedule I hereto.

 

[Signature page to Underwriting Agreement]

 



 

Schedule I

 

Underwriter

 

Units

 

Credit Suisse Securities (USA) LLC

 

3,080,000

 

Wells Fargo Securities, LLC

 

3,080,000

 

UBS Securities LLC

 

1,320,000

 

Goldman, Sachs & Co.

 

660,000

 

Raymond James & Associates, Inc.

 

660,000

 

 

 

8,800,000

 

 

I-1



 

SCHEDULE II

 

Applicable Time: 8:45 p.m. (New York City time) on February 15, 2017

 

Price per Common Unit: $22.001

 

II-1



 

EXHIBIT A

 

SIGNIFICANT SUBSIDIARIES OF THE PARTNERSHIP

 

Name

 

Jurisdiction
of
Formation

 

Jurisdictions of
Foreign
Qualification

 

Names of 
Managers/
Members

 

 

 

 

 

 

 

NGL Energy Operating LLC

 

Delaware

 

AL, AR, CA, CT, CO, FL, IL, KS, KY, LA, MD, MI, MN, MO, NC, NE, NM, NY, ND, OK, PA, SD, TX, VA, WA, WV, WY

 

NGL Energy Partners LP

 

 

 

 

 

 

 

NGL Crude Logistics, LLC

 

Delaware

 

AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, MA, MD, ME, MI, MN, MS, MO, MT, NC, NE, NH, NJ, NM, NY, ND, NV, OH, OK, OR, PA, RI, SC, SD, TX, UT, VA, VT, WA, WI, WV, WY

 

NGL Energy Operating LLC

 

 

 

 

 

 

 

NGL Liquids, LLC

 

Delaware

 

AL, IA, IL, IN, KS, KY, MI, MS, MO, NJ, NY, NC, OH, OK, PA, TX, WI

 

NGL Energy Operating LLC

 

 

 

 

 

 

 

NGL Propane, LLC

 

Delaware

 

AL, CO, FL, NC, TN

 

NGL Energy Operating LLC

 

 

 

 

 

 

 

NGL Supply Terminal Company, LLC

 

Delaware

 

AZ, AR, IL, IN, LA, ME, MA, MN, MO, MT, NM, WA, WI

 

NGL Liquids, LLC

 

 

 

 

 

 

 

NGL Supply Wholesale, LLC

 

Delaware

 

AL, AR, AZ, CA, CO, CT, FL, GA, IA, ID, IL, IN, KS, KY, LA, MD, ME, MA, MI, MN, MS, MO, MT, NC, ND, NE, NH, NJ, NM, NY, NV, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WI, WY

 

NGL Liquids, LLC

 

A-1



 

NGL Crude Transportation, LLC

 

Colorado

 

KS, ND, NM, OK, TX

 

NGL Crude Logistics, LLC

 

 

 

 

 

 

 

NGL Crude Terminals, LLC

 

Delaware

 

AL, AZ, CO, FL, KS, LA, MO, ND, NJ, NM, OK, PA, TX, WY

 

NGL Crude Transportation, LLC

 

 

 

 

 

 

 

NGL Energy Logistics, LLC

 

Delaware

 

 

NGL Crude Logistics, LLC

 

 

 

 

 

 

 

Osterman Propane, LLC

 

Delaware

 

CT, DC, IL, MA, MD, ME, NH, NJ, NY, PA, RI, VA, VT

 

NGL Propane, LLC

 

 

 

 

 

 

 

Centennial Energy, LLC

 

Colorado

 

AL, AR, AZ, CA, CT, DE, FL, GA, IA, ID, IL, IN, KS, KY, LA, MD, MA, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NY, NV, OH, OK, OR, PA, SC, TX, UT, VA, WA, WI, WV, WY

 

NGL Liquids, LLC

 

 

 

 

 

 

 

High Sierra Crude Oil & Marketing, LLC

 

Colorado

 

AL, AR, MT, NM, TX, UT

 

NGL Crude Logistics, LLC

 

 

 

 

 

 

 

NGL Water Solutions, LLC

 

Colorado

 

 

NGL Energy Operating LLC

 

 

 

 

 

 

 

AntiCline Disposal, LLC

 

Wyoming

 

 

NGL Water Solutions, LLC

 

 

 

 

 

 

 

TransMontaigne LLC

 

Delaware

 

CO, FL, GA

 

N/A

 

 

 

 

 

 

 

TransMontaigne Product Services LLC

 

Delaware

 

AL, AK, AZ, AR, CA, CO, CT, D.C., FL, GA, HI, ID, IN, IA, IL, KS, KY, LA, MA, ME, MD, MI, MN, MS, MO, NE, NV, NH, NM, NJ, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WI, WV, WY

 

TransMontaigne LLC

 

A-2



 

Choya Operating, LLC

 

Texas

 

 

NGL Water Solutions Eagle Ford, LLC

 

 

 

 

 

 

 

OPR, LLC

 

Delaware

 

 

Osterman Propane, LLC

 

 

 

 

 

 

 

NGL Crude Canada ULC

 

Alberta

 

British Columbia, Manitoba, Saskatchewan, Ontario

 

NGL Crude Canada Holdings, LLC

 

 

 

 

 

 

 

NGL Shipping and Trading, LLC

 

Delaware

 

 

NGL Crude Logistics, LLC

 

 

 

 

 

 

 

Hicksgas, LLC

 

DE

 

CO, IL, IN, MS, NV, OR, TN, UT, WA, WI, WY

 

NGL Propane, LLC

 

A-3



 

GENERAL PARTNER; PARTNERSHIP

 

Name

 

Jurisdiction
of
Formation

 

Jurisdictions of
Foreign
Qualification

 

 

 

 

 

NGL Energy Holdings LLC

 

Delaware

 

OK

 

 

 

 

 

NGL Energy Partners LP

 

Delaware

 

CO, OK

 

A-4



 

EXHIBIT B

 

LIST OF PERSONS SUBJECT TO LOCK-UP

 

H. Michael Krimbill

 

KRIMGP2010, LLC

 

KRIM2010, LLC

 

Krimbill Enterprises LP

 

Robert W. Karlovich III

 

Shawn W. Coady

 

Coady Enterprises, LLC

 

SWC Family Partnership LP

 

2012 Shawn W. Coady Irrevocable Insurance Trust

 

Todd M. Coady

 

TMC Family Partnership LP

 

2012 Todd M. Coady Irrevocable Insurance Trust

 

Thorndike, LLC

 

Vincent J. Osterman

 

V E Properties XI, LLC

 

AO Energy, Inc.

 

E. Osterman, Inc.

 

E. Osterman Gas Services, Inc.

 

E. Osterman Propane, Inc.

 

Milford Propane, Inc.

 

Osterman Family Foundation

 

Osterman Propane, Inc.

 

Propane Gas, Inc.

 

Saveway Propane Gas Service, Inc.

 

B-1



 

EXHIBIT C

 

FORM OF LOCK-UP AGREEMENT

 

NGL Energy Partners LP

 

Public Offering of Common Units

 

Dated as of           , 2017

 

Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, New York 10010-3629

 

Wells Fargo Securities, LLC
375 Park Avenue
New York, New York 10152

 

As Representatives of the several Underwriters

 

Ladies and Gentlemen:

 

This agreement is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”) by and among NGL Energy Partners LP, a Delaware limited partnership (the “Partnership”), Credit Suisse Securities (USA) LLC (“Credit Suisse”) and Wells Fargo Securities, LLC (“Wells Fargo”, together with Credit Suisse, the “Representatives”), as representatives of a group of underwriters (the “Underwriters”) relating to a proposed underwritten public offering of common units representing limited partner interests (the “Common Units”) in the Partnership.  Terms used but not defined herein have the respective meanings ascribed to such terms in the Underwriting Agreement.

 

In order to induce you and the other Underwriters to enter into the Underwriting Agreement, and in light of the benefits that the offering of the Common Units will confer upon the undersigned in its capacity as a securityholder and/or an officer or director of the Partnership or the General Partner, as the case may be, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with the Underwriters that, during the period beginning on and including the date of the Underwriting Agreement through and including the date that is the 45th day after the date of the Underwriting Agreement (the “Lock-Up Period”), the undersigned will not, without the prior written consent of the Representatives, directly or indirectly:

 

(i)  offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend

 

C-1



 

or otherwise transfer or dispose of any Common Units, other equity securities of the Partnership or any securities convertible into or exercisable or exchangeable for Common Units or other equity securities of the Partnership, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition, or

 

(ii)  enter into any swap or other agreement, arrangement or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of any Common Units, other equity securities of the Partnership or any securities convertible into or exercisable or exchangeable for any Common Units or other equity securities of the Partnership,

 

whether any transaction described in clause (i) or (ii) above is to be settled by delivery of Common Units, other equity securities, in cash or otherwise, or publicly announce any intention to do any of the foregoing.

 

Notwithstanding the provisions set forth above, the undersigned may, without the prior written consent of the Representatives, transfer any Common Units, other equity securities or any securities convertible into or exchangeable or exercisable for Common Units or other equity securities:

 

(1) if the undersigned is a natural person, (i) as a bona fide gift or gifts or by will, by intestate succession or pursuant to a so-called “living trust” or other revocable trust established to provide for the disposition of property on the undersigned’s death, in each case to any member of the immediate family (as defined below) of the undersigned or to a trust the beneficiaries of which are exclusively the undersigned or members of the undersigned’s immediate family, or as a bona fide gift or gifts to a charity or educational institution and (ii) as required or permitted by the NGL Energy Partners LP 2011 Long-Term Incentive Plan or any other of the Partnership’s benefit plans that are described in the Registration Statement to reimburse or pay income tax or withholding obligations in connection with the vesting or exercise of any awards under such plans,

 

(2) if the undersigned is a partnership or a limited liability company, to a partner or member, as the case may be, of such partnership or limited liability company if, in any such case, such transfer is not for value, and

 

(3) in a private transaction, block trade or other similar arrangement not effectuated in the open market on any national securities exchange, [and

 

(4) in sales made pursuant to that certain plan adopted by the undersigned pursuant to Rule 10b5-1 under the Exchange Act (the “10b5-1 Plan”) in accordance with the terms of such 10b5-1 Plan in existence as of the date hereof without any further amendment or modification, but only to the extent that any filing made pursuant to Section 16(a) under the Exchange Act reporting any such sale made pursuant to this exception shall indicate that the sale was made pursuant to the 10b5-1 Plan;](1)

 


(1)  To be included in agreement for Osterman Family Foundation

 

C-2



 

provided, however, that in the case of any transfer described in clause (1)(i), (2) or (3) above, it shall be a condition to the transfer that (A) the transferee executes and delivers to the Representative, not later than one business day prior to such transfer, a written agreement, in substantially the form of this agreement (it being understood that any references to “immediate family” in the agreement executed by such transferee shall expressly refer only to the immediate family of the undersigned and not to the immediate family of the transferee) and otherwise satisfactory in form and substance to the Representatives, (B) in the case of a transfer pursuant to clause (1)(i) above, if the undersigned is required to file a report under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), reporting a reduction in beneficial ownership of Common Units, other equity securities or any securities convertible into or exercisable or exchangeable for Common Units or other equity securities by the undersigned during the Lock-Up Period, the undersigned shall include a statement in such report to the effect that such transfer is not a transfer for value and that such transfer is being made as a gift, by will or intestate succession or pursuant to a so-called “living trust” or other revocable trust established to provide for the disposition of property on the undersigned’s death, as the case may be, (C) in the case of a transfer pursuant to clause (2) or (3) above, no filing under Section 16(a) of the 1934 Act reporting a reduction in beneficial ownership of Common Units, other equity securities or any securities convertible into or exercisable or exchangeable for Common Units or other equity securities shall be required to be made during the Lock-Up Period and (D) in the case of a transfer pursuant to clause (1), (2) or (3) above, no voluntary filing with the Securities and Exchange Commission or other public report, filing or announcement shall be made in respect of such transfer during the Lock-Up Period; and provided, further that the restrictions set forth above shall not apply to (x) the offer and sale of the Common Units pursuant to the Underwriting Agreement or (y) bona fide pledges of Common Units in existence on the date hereof.  For purposes of this paragraph, “immediate family” shall mean any relationship by blood, marriage or adoption not more remote than the first cousin (including by adoption).

 

The undersigned further agrees that (i) it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to the registration under the Securities Act of 1933, as amended (the “1933 Act”), of any Common Units, other equity securities or any securities convertible into or exercisable or exchangeable for Common Units or other equity securities, and (ii) the Partnership may, with respect to any Common Units, other equity securities or any securities convertible into or exercisable or exchangeable for Common Units or other equity securities owned or held (of record or beneficially) by the undersigned, cause the transfer agent or other registrar to enter stop transfer instructions and implement stop transfer procedures with respect to such securities during the Lock-Up Period.

 

In addition, the undersigned hereby waives any and all notice requirements and rights with respect to the registration of any securities pursuant to any agreement, instrument, understanding or otherwise, including any registration rights agreement or similar agreement, to which the undersigned is a party or under which the undersigned is entitled to any right or benefit, provided that such waiver shall apply only to the public offering of Common Units pursuant to the Underwriting Agreement and each registration statement filed under the 1933 Act in connection therewith.

 

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this agreement and that this agreement has been duly authorized (if

 

C-3



 

applicable), executed and delivered by the undersigned and is a valid and binding agreement of the undersigned.  This agreement and all authority herein conferred are irrevocable and shall survive the death or incapacity of the undersigned (if a natural person) and shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

 

If (i) the Underwriting Agreement is not executed by the parties thereto prior to [·], 2017, (ii) the Partnership notifies the undersigned and the Representatives in writing that it does not intend to proceed with the offering of Common Units or (iii) for any reason the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Units to be sold thereunder, this agreement shall automatically terminate and become null and void.

 

The undersigned acknowledges and agrees that whether or not any public offering of Common Units actually occurs depends on a number of factors, including market conditions.

 

[Signature Page Immediately Follows]

 

C-4



 

IN WITNESS WHEREOF, the undersigned has executed and delivered this agreement as of the date first set forth above.

 

 

 

Yours very truly,

 

 

 

 

 

 

 

Print Name:

 



 

EXHIBIT D

 

FORM OF OPINION OF PARTNERSHIP COUNSEL

 

1.                                      The Partnership is validly existing as a limited partnership under the laws of the State of Delaware and is in good standing under the laws of the State of Delaware. The General Partner is validly existing as a limited liability company under the laws of the State of Delaware and is in good standing under the laws of the State of Delaware.

 

2.                                      Each “significant subsidiary” as defined by Rule 1-02 of Regulation S-X is validly existing as a limited partnership, limited liability company or corporation, as the case may be, under the laws of its jurisdiction of formation, as set forth on Exhibit A, and is in good standing under the laws of such jurisdiction.

 

3.                                      The Partnership has the limited partnership power to (i) own its respective properties and conduct its business, in all material respects, as described in the General Disclosure Package and the Prospectus and (ii) execute and deliver the Underwriting Agreement and perform its obligations thereunder. The Partnership has the limited partnership power to issue and sell the Units in accordance with the terms and conditions set forth in the Underwriting Agreement and the Partnership Documents. The General Partner has the limited liability company power to act as the general partner of the Partnership.

 

4.                                      The Underwriting Agreement has been duly authorized, executed and delivered by the Partnership.

 

5.                                      When issued and delivered in accordance with the terms of the Underwriting Agreement against payment therefor, the Units will be duly authorized and validly issued, and under the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”), purchasers of the Units will have no obligation to make further payments for their purchase of Units or contributions to the Partnership solely by reason of their ownership of Units or their status as limited partners of the Partnership and no personal liability for the debts, obligations and liabilities of the Partnership, whether arising in contract, tort or otherwise, solely by reason of being limited partners of the Partnership.

 

6.                                      The General Partner is the sole general partner of the Partnership and owns of record a 0.1% general partner interest in the Partnership (the “GP Interest”) and owns all of the incentive distribution rights in the Partnership (the “Incentive Distribution Rights”), free and clear of all Liens (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the General Partner as debtor is on file in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to us, in the case of (i) and (ii), other than those Liens that are (A) created under the Delaware LLC Act, (B) created in connection with the Credit Agreement and the Note Purchase Agreement, (C) created by the Partnership Documents or (D) disclosed in the General Disclosure Package and the Prospectus. The GP Interest and the Incentive Distribution Rights have been duly authorized and validly issued in accordance with the Partnership Documents.

 

7.                                      The Partnership owns of record 100% of the issued and outstanding membership interests in NGL Operating, free and clear of all Liens (i) in respect of which a

 

D-1



 

financing statement under the Uniform Commercial Code of the State of Delaware naming the Partnership as debtor is on file in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to us, in the case of (i) and (ii), other than those Liens that are (A) created under the Delaware LLC Act, (B) created in connection with the Credit Agreement and the Note Purchase Agreement, (C) created by the NGL Operating Documents or (D) disclosed in the General Disclosure Package and the Prospectus.  Such membership interests have been duly authorized and validly issued in accordance with the NGL Operating Documents, and under the Delaware LLC Act, the Partnership will have no obligation to make further payments for its membership interests or contributions to NGL Operating solely by reason of its ownership of membership interests or its status as a member of NGL Operating and no personal liability for the debts, obligations and liabilities of NGL Operating, whether arising in contract, tort or otherwise, solely by reason of being a member of NGL Operating.

 

8.                                      The Partnership Agreement has been duly authorized, executed and delivered by the Partnership and is a valid and legally binding agreement of the Partnership, enforceable against the Partnership in accordance with its terms under the Specified Laws of the State of Delaware. The Partnership Agreement constitutes a valid and binding obligation of the General Partner, and is enforceable against the General Partner, in its capacity as general partner of the Partnership, in accordance with its terms.

 

9.                                      Except as described in the General Disclosure Package and the Prospectus, or, in the case of transfer restrictions, options to purchase, other rights to subscribe or to purchase, voting restrictions and preemptive rights, created by the Partnership Documents, there are no options, warrants, preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any equity interests in the Partnership pursuant to any Partnership Document, any Specified Contract or any law, rule or regulation of any Specified Law (as defined below), other than those restrictions upon the transfer of equity interests created in connection with the Credit Agreement, the Note Purchase Agreement, the Indenture, dated as of October 16, 2013, among the Partnership, NGL Energy Finance Corp., the guarantors party thereto and U.S. Bank National Association, as Trustee, as amended or supplemented from time to time, the Indenture, dated as of July 9, 2014, among the Partnership, NGL Energy Finance Corp., the guarantors party thereto and U.S. Bank National Association, as Trustee, as amended or supplemented from time to time, the Indenture, dated as of October 24, 2016, among the Partnership, NGL Energy Finance Corp., the guarantors party thereto and U.S. Bank National Association, as Trustee, as amended or supplemented from time to time, [and the Indenture, dated as of February [22], 2017, among the Partnership, NGL Energy Finance Corp., the guarantors party thereto and U.S. Bank National Association, as Trustee, as amended or supplemented from time to time].  None of the offering, issuance or sale of the Common Units as contemplated by the Underwriting Agreement gives rise under the Partnership Documents or any Specified Contract to any rights for inclusion in the Registration Statement of any Common Units or other securities of the Partnership, other than those that have been waived or are otherwise unavailable to applicable holders of Common Units pursuant to the terms of the relevant Specified Contract.

 

10.                               None of the offering, issuance and sale of the Units or the execution and delivery by the Partnership of, and the performance by the Partnership of its obligations under, the Underwriting Agreement conflicts or will conflict with or constitutes or will constitute a

 

D-2



 

breach or violation of or a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, or results or will result in the creation or imposition of any Lien upon any property or assets of the Partnership pursuant to (i) any Partnership Document, (ii) any Specified Contract, (iii) any Specified Law, (iv) any order, judgment, decree or injunction of any court or governmental agency or body known to us and applicable to the Partnership Entities or any of their properties in a proceeding to which any of them or their property is a party or (v) any preemptive rights, rights of first refusal or similar rights granted under the Partnership Documents, the Delaware LP Act or any Specified Contract; provided, however, that no opinion is expressed pursuant to this paragraph with respect to federal securities laws and other anti-fraud laws.

 

11.                               No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required in connection with the offering, issuance and sale of the Units by the Partnership or the execution and delivery by the Partnership of, and the performance by the Partnership of its obligations under, the Underwriting Agreement, except (i) such as may be required by the securities or Blue Sky laws and regulations of the various jurisdictions in connection with the offer and sale of the Units and (ii) those that have been obtained.

 

12.                               The Registration Statement has become effective under the Securities Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending under the Securities Act; any required filing of the Pre-Pricing Prospectus or the Prospectus pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act has been made in the manner and within the time period required by Rule 424(b) (without reference to Rule 424(b)(8)).

 

13.                               The Registration Statement (other than the financial statements and related schedules and other financial data included or incorporated by reference therein), as of the date the Registration Statement originally became effective under the Securities Act, and together with the Pre-Pricing Prospectus and the Prospectus, as of each “new effective date” with respect to the Common Units pursuant to and within the meaning of Rule 430B(f)(2) under the Securities Act, appears to have complied, the Pre-Pricing Prospectus and the Prospectus (other than the financial statements and related schedules and other financial data included or incorporated by reference therein), as of their respective dates, appear to have complied, and the Prospectus (other than the financial statements and related schedules and other financial data included or incorporated by reference therein), as of the date hereof, appears to comply, in each case, as to form in all material respects with the requirements of the Securities Act and the rules and regulations thereunder, except that we express no opinion or assurance as to the accuracy, completeness or fairness of the statements contained in the Registration Statement, the General Disclosure Package or the Prospectus (except to the extent specified in paragraph 14 below); and the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act (other than the financial statements, related schedules and other financial data therein, as to which we express no opinion), as of their respective dates of filing with the Commission, appear on their face to comply as to form, in all material respects, with the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

14.                               The information included or incorporated by reference in the General

 

D-3



 

Disclosure Package and the Prospectus under the captions “Our Cash Distribution Policy,” “Description of Common Units,” “Our Partnership Agreement,” “Material U.S. Federal Income Tax Considerations,” “Material U.S. Federal Income Tax Considerations Supplement,” “Certain Relationships and Related Transactions, and Director Independence,” “Business—Government Regulation” and the information in the Registration Statement under Items 14 and 15 of Part II thereof, insofar as it purports to constitute a summary of any agreement, statute or regulation or refers to statements of law or legal conclusions, constitutes an accurate summary of the matters described therein in all material respects, except that we express no opinion as to the actual number of shares of Common Units outstanding as of a particular date.  The Common Units (including the Units) and the Incentive Distribution Rights conform in all material respects to the descriptions thereof contained in the Pre-Pricing Prospectus and the Prospectus under the captions “Description of Common Units” and “Our Partnership Agreement.”

 

15.                               The Partnership is not, and immediately after giving effect to the offering and sale of the Common Units as described in the Prospectus will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

In connection with the Partnership’s preparation of the Registration Statement, the General Disclosure Package and the Prospectus, we, as counsel to the Partnership, have considered the information set forth and incorporated by reference therein in light of the matters required to be stated therein, and we, as counsel to the Partnership, have participated in conferences with your representatives and counsel, representatives of the Partnership and the Partnership’s independent auditors at which the contents of the Registration Statement, the General Disclosure Package, the Prospectus and related matters were discussed.  We have not independently verified and are not passing upon the accuracy, fairness or completeness of the statements contained or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, except to the extent set forth in paragraph 14 above.  Based on the foregoing, no facts came to our attention as a result of such consideration and participation that caused us to believe that:

 

i.                  the Registration Statement (other than the financial statements, related schedules and other financial data therein, the report of management’s assessment of the effectiveness of internal controls over financial reporting and the auditors’ attestation report thereon, as to which we express no view), as of each “new effective date” with respect to the Units pursuant to and within the meaning of Rule 430(B)(f)(2) under the Securities Act, contained an untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading;

 

ii.               the General Disclosure Package (other than the financial statements, related schedules and other financial data therein, the report of management’s assessment of the effectiveness of internal controls over financial reporting and the auditors’ attestation report thereon, as to which we express no view), as of the Applicable Time (6:45 p.m. (New York City time) on February 15, 2017), contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or

 

D-4



 

iii.            the Prospectus (other than the financial statements, related schedules and other financial data therein, the report of management’s assessment of the effectiveness of internal controls over financial reporting and the auditors’ attestation report thereon, as to which we express no view), as of its date and as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

D-5



 

EXHIBIT E

 

PRICE-RELATED INFORMATION

 

Public offering price: As to each investor, the price paid by such investor.

 

Total Common Units Offered: 8,800,000

 

Settlement date:  February 22, 2017

 

E-1



 

EXHIBIT F

 

ISSUER FREE WRITING PROSPECTUS

 

None.

 

F-1



 

EXHIBIT G

 

ADDITIONAL SUBSIDIARIES OF THE PARTNERSHIP

 

Name

 

Jurisdiction
of
Formation

 

Jurisdictions of
Foreign
Qualification

 

Names of Managers/
Members

 

 

 

 

 

 

 

High Sierra Energy, LP

 

Delaware

 

AR, WY

 

High Sierra Energy GP, LLC

 

 

 

 

 

 

 

High Sierra Energy Operating, LLC

 

Colorado

 

 

High Sierra Energy, LP

 

 

 

 

 

 

 

NGL Crude Canada Holdings, LLC

 

Colorado

 

 

High Sierra Crude Oil & Marketing, LLC

 

 

 

 

 

 

 

NGL Energy Holdings II, LLC

 

Delaware

 

 

NGL Crude Logistics, LLC

 

 

 

 

 

 

 

NGL-NE Real Estate, LLC

 

Delaware

 

CT, MA, ME, NH, NJ, RI

 

NGL Propane, LLC

 

 

 

 

 

 

 

NGL-MA Real Estate, LLC

 

Delaware

 

MD, NJ, PA

 

NGL Propane, LLC

 

 

 

 

 

 

 

NGL-MA, LLC

 

Delaware

 

MD, NJ, PA

 

NGL Propane, LLC

 

 

 

 

 

 

 

NGL Water Solutions Eagle Ford, LLC

 

Delaware

 

TX

 

NGL Water Solutions, LLC

 

 

 

 

 

 

 

NGL Water Solutions Permian, LLC

 

Colorado

 

TX

 

NGL Water Solutions, LLC

 

 

 

 

 

 

 

NGL Supply Terminal Solution Mining, LLC

 

Utah

 

 

Sawtooth NGL Caverns, LLC

 

 

 

 

 

 

 

NGL Energy Equipment LLC

 

Colorado

 

 

NGL Energy Partners LP

 

 

 

 

 

 

 

Sawtooth NGL Caverns, LLC

 

Delaware

 

UT

 

NGL Supply Terminal Company LLC

 

 

 

 

 

 

 

TransMontaigne Services LLC

 

Delaware

 

 

N/A

 

 

 

 

 

 

 

NGL Milan Investments, LLC

 

Colorado

 

 

NGL Crude Transportation, LLC

 

 

 

 

 

 

 

NGL Water Solutions Mid-Continent, LLC

 

Colorado

 

TX

 

NGL Water Solutions, LLC

 

 

 

 

 

 

 

NGL Water Solutions Bakken, LLC

 

Colorado

 

ND

 

NGL Water Solutions, LLC

 

 

 

 

 

 

 

Grand Mesa Pipeline, LLC

 

Delaware

 

CO, KS, OK

 

NGL Crude Terminals, LLC

 

 

 

 

 

 

 

NGL Crude Cushing, LLC

 

Oklahoma

 

 

NGL Crude Logistics, LLC

 

 

 

 

 

 

 

NGL Crude Pipelines, LLC

 

Oklahoma

 

NM, TX

 

NGL Crude Logistics, LLC

 

G-1



 

Name

 

Jurisdiction
of
Formation

 

Jurisdictions of
Foreign
Qualification

 

Names of Managers/
Members

 

 

 

 

 

 

 

Centennial Gas Liquids, ULC

 

Alberta

 

 

Centennial Energy LLC

 

 

 

 

 

 

 

NGL Water Solutions DJ, LLC

 

Colorado

 

NM, OK, TX

 

NGL Water Solutions, LLC

 

 

 

 

 

 

 

NGL Marine, LLC

 

Texas

 

LA

 

NGL Crude Transportation, LLC

 

 

 

 

 

 

 

Varata, LLC

 

Texas

 

 

NGL Water Solutions, LLC

 

 

 

 

 

 

 

High Sierra Energy GP, LLC

 

Colorado

 

AR

 

NGL Energy Holdings LLC

 

 

 

 

 

 

 

NGL Energy Finance Corp

 

Delaware

 

 

NGL Energy Partners LP

 

 

 

 

 

 

 

NGL Gateway Terminals, Inc.

 

Canada

 

 

NGL Liquids, LLC

 

2